Prepaid Cards are pre-funded and re-loadable cards that can be used to pay bills and make purchases. If you own a prepaid card, you fund them directly, there is no need for you to have a formal bank account. In this email, you will be learning about prepaid cards, types of prepaid cards, and how to get one in Nigeria.

prepaid card

What is a Prepaid Card?

A prepaid card is a type of payment card that is not connected to a bank account or wallet. Unlike your bank card which is connected to the money in your bank account, prepaid cards are not connected to a balance. To spend with a prepaid card, you have to load money into the card either once or a certain number of times.

Types of Prepaid Cards

  1. One-time cards
  2. Re-loadable cards

A prepaid card can either be pre-funded or re-loadable.

One-time Prepaid Cards

A one-time prepaid card is a pre-funded card. It can only be funded once. You simply fund the card with a specific amount at the time of creation. Let’s say you found an item on Amazon you want to purchase, and your total bill (+ shipping) is $50. You can create a one-time prepaid card and fund it with $50 to pay for the item.

It works just like gift cards. You can’t increase the amount contained in the card. If you purchase an Amazon gift card of $100, you can’t increase the card amount to $200, you will have to get another $100 card.

If you will need the card for another transaction, you can pre-fund the card with a higher amount so as to spend on more things.

There are some one-time cards that are configured to be used only once. They are ideal for one-time payments. And they protect your privacy and shield your card from getting hacked or charged without your permission.

Benefits of one-time prepaid cards

  1. Budgeting: Since they are easy to create and can’t be reloaded more than once, you can create multiple cards for each of your monthly spends. For example, you can set aside $100 in one card for your daily Uber commute and $200 in another card for monthly online orders.
  2. Unauthorized charges: If you subscribe to a service online like Audible by Amazon, and you no longer desire to use it, you will be charged if you don’t forget to cancel your subscription. But with a one-time card, you can just pay for a 12-month plan and relax knowing that the card can no longer be used anymore; No shocking debit.
  3. Privacy: Since the one-time can only be used or loaded once, you won’t be using the same card on multiple sites. This help protects your privacy just like paying with cash; you can’t use the same N1000 note in multiple stores.

One-time cards are great for budgeting your spending and protect you from unexpected charges. However, you’re often required to create a new card for most of your purchases.

Reloadable Prepaid Cards

This is a kind of prepaid card that you can always load money into it. Unlike a one-time card, when you exhaust the money in a re-loadable prepaid card, you can load additional money into it and spend it.

Most virtual cards in Nigeria are re-loadable. While they are not connected to your bank account or wallet, you can always top the card with more funds.

Benefits of Reloadable Prepaid Cards

  • Multiple payments: You can use the cards multiple times for payment as long as they’re still valid.
  • Budgeting: Just like one-time cards, re-loadable cards are also great for budgeting. Since they can be loaded multiple times, you can create multiple cards to categorize your spending. For example, you can create a card for TV subscriptions, and another set aside for Online purchases. You simply load these cards once they are exhausted and you get clear details of your last spend on each of them.
  • Recurring payments: You can use re-loadable prepaid cards to pay for subscriptions like Netflix without having to enter new card details every month. Netflix can simply charge this card on a recurring basis.

How to get a Prepaid Card

A prepaid card can either be physical or virtual. And they are usually denominated in naira or dollars.

Virtual Prepaid Cards

Virtual prepaid cards are easier to get compared to physical ones. There are several apps that provide virtual prepaid cards. You can create, load, and manage your card within a mobile app.

Forward Apps

Best dollar virtual card apps in 2023 (April)

A virtual card is an online payment card. Unlike a physical card, you can’t use a virtual card offline (POS or ATMs). You can only use a virtual card to pay for things online. To get a virtual card, you simply need a virtual card provider. The easiest way is to…

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3 months ago · 1 like · Jeremy Ikwuje

Physical Prepaid Cards

You can get a physical prepaid card from banks. United Bank for Africa (UBA) is one of the leading commercial banks in Nigeria that provide physical prepaid cards. You don’t have to open an account with them. The challenge is, to load money into the card you have to visit the bank.

Conclusion

Prepaid cards are great in the sense that they’re not connected to your bank account or wallet. This is good because it shields your account from unexpected debits. There was an account I stopped using because I was receiving unexpected debit notifications from a service I couldn’t trace or remember using.

However, since they are not connected to your bank account you will have to create a new card or load them before you can spend.

Another disadvantage with prepaid cards is that they last a few years or months, usually 3-6 months. Although some can last up to 5 years.

You should get a prepaid card in dollars or Naira if you care about budgeting, and privacy, or want to keep your bank account safe from unexpected online charges.