Legal Definitions - prepaid card

A prepaid card, also known as a stored-value card, is a device that allows access to a specific amount of funds for making payments to others. It is the only way to access the funds and does not have an associated account in the holder's name.

For example, a consumer can pay a bank or merchant money in exchange for a stored-value card. The consumer can then use the card instead of cash to purchase goods and services. This type of card is often used for gift cards, travel cards, and phone cards.

Prepaid cards are convenient because they eliminate the need to carry cash and can be used anywhere that accepts debit or credit cards. They also provide a way to control spending since the cardholder can only spend the amount loaded onto the card.