Prepaid cards — Don’t buy until you know how they work

The holiday season is here, and a lot of people are still looking for something to give their loved ones. For many, prepaid cards are the perfect solution. But before buying these cards, it’s important to know their terms of use because they don’t all work the same way.

Read your prepaid card agreement carefully to find out the expiry date and whether there are any fees or limits on how it can be used. Depending on the type of card, there may be fees to activate it, make purchases, check your balance, withdraw money from a bank machine, load more money onto the card, or maintain the card if you don’t use it for a certain period of time.

Various types of prepaid cards are available. Promotional cards are accepted only by certain retail chains or shopping centres. They generally have an expiry date and cannot be reloaded or used to make withdrawals.

Prepaid cards issued by a financial institution are linked to payment card networks such as Visa, MasterCard or American Express. They can be used at most stores that display the network logo. The money on these cards does not expire, but the card itself may expire.

When gifting one of these cards, make sure the recipient is aware of all the terms of use and has the proof of purchase, to avoid any surprises.

Learn more at canada.ca/money

– News Canada

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