What a prepaid award card is and how it works
A prepaid award card is a payment card loaded with funds by an employer, government agency, or organisation as a reward, bonus, or benefit. Unlike a credit card, you can only spend money that has already been loaded onto it. The card works like a debit card at most retailers, ATMs, and online merchants that accept Visa or Mastercard.
When you receive a prepaid award card, the issuer has already deposited a set amount of money into the account linked to that card. You don't need to open a bank account or go through a credit check. The card is ready to use as soon as you set up it, and you can check your balance and transaction history through the card issuer's website or mobile app.
Prepaid award cards are commonly used by employers to distribute performance bonuses, by government programs to deliver benefits, and by organisations to give gift cards or incentive rewards. Each card comes with its own terms, fees, and expiration date depending on who issued it.
Key Takeaways
- Prepaid award cards are funded in advance and work like debit cards — you can only spend what has been loaded onto them.
- You must set up your card before using it, usually through the issuer's website, phone line, or mobile app.
- Check your card's terms for fees, expiration dates, and any restrictions on where you can use it.
- You can withdraw cash at ATMs, but most cards charge a fee for each withdrawal.
- If your card is lost or stolen, contact the issuer when ready to freeze the account and request a replacement.
How to set up your prepaid award card
set up is required before you can use your card. Most prepaid award cards come with instructions that tell you how to set up — either online, by phone, or through a mobile app. The set up process usually takes a few minutes and requires you to verify your identity.
To set up online, visit the card issuer's website (the name and web address are printed on the card or in the paperwork that came with it). Look for an "set up Card" or "get your free guide" link. You will need to enter the card number, expiration date, and CVV (the three-digit security code on the back). You may also need to create a login username and password so you can check your balance and transactions later.
If you prefer to set up by phone, call the customer service number on the back of your card or in the welcome materials. A representative will walk you through verification questions and confirm your set up. Some cards also offer set up through their mobile app — read the app, select "set up Card," and follow the prompts.
Once activated, your card is ready to use when ready. You will receive a confirmation email or text message. Keep this confirmation and your login details in a safe place.
Checking your balance and viewing transactions
You can check your prepaid award card balance in several ways. The fastest method is usually the card issuer's website or mobile app. Log in with the username and password you created during set up, and your current balance will appear on the dashboard.
Many prepaid award cards also let you check your balance by calling the customer service number on the back of the card. A representative or automated system will ask you to verify your identity and then tell you your balance over the phone. Some cards allow you to text a keyword to a specific number to receive your balance by text message.
When you view your account online or through the app, you can also see a full history of every purchase, ATM withdrawal, and fee charged to the card. This transaction history is useful if you need to dispute a charge or straightforward want to track how you have spent the funds. Most cards keep transaction records for at least 12 months.
Using your card at stores, online, and at ATMs
At a physical store or restaurant, use your prepaid award card exactly like a debit card. Insert it into the chip reader, tap it if the terminal supports contactless payment, or swipe it if the store still uses the magnetic stripe. Enter your PIN (personal identification number) when prompted, or sign the receipt if the merchant does not require a PIN.
For online purchases, enter the card number, expiration date, CVV, and billing address in the checkout form, just as you would with a credit or debit card. Most online retailers accept prepaid cards without issue. If a merchant declines your card, it may be because the card has insufficient funds, the card has expired, or the merchant does not accept that card brand (Visa or Mastercard).
You can withdraw cash at ATMs that display the Visa or Mastercard logo. Insert your card, enter your PIN, and select the withdrawal amount. Most prepaid award cards charge a fee for each ATM withdrawal — this fee is typically $2 to $3 per transaction and is deducted from your card balance. Some cards offer a limited number of free ATM withdrawals per month before fees explore. Check your card's terms to understand the ATM fee structure.
Understanding fees and expiration dates
Prepaid award cards may charge several types of fees, though many cards issued as rewards or benefits have reduced or waived fees. Common fees include ATM withdrawal fees (usually $2 to $3 per transaction), inactivity fees (charged if you don't use the card for a set period, often 12 months), balance inquiry fees, and customer service fees. Some cards charge a monthly maintenance fee, though this is less common on award cards.
Your card also has an expiration date printed on the front. This is the date after which you cannot use the card to make purchases or withdraw cash. The expiration date does not mean your money disappears — most card issuers allow you to request a replacement card or transfer remaining funds to another account. However, you must act before the expiration date passes.
Read the terms and conditions that came with your card or visit the issuer's website to see the full fee schedule and expiration date. Understanding these details helps you avoid surprise charges and ensures you use your funds before the card expires.
What to do if your card is lost, stolen, or damaged
If your prepaid award card is lost or stolen, contact the card issuer's customer service line when ready. The phone number is on the back of your card or in your welcome materials. Tell the representative that your card is missing, and they will freeze the account to prevent unauthorised use. This stops anyone else from spending the remaining balance.
The issuer will cancel the old card and issue a replacement, usually within 7 to 10 business days. Your remaining balance transfers to the new card automatically. In the meantime, you cannot access the funds on the old card. If you need cash urgently, ask the issuer whether they can expedite the replacement or transfer funds to a bank account you own.
If your card is damaged — cracked, bent, or the numbers are worn away — you can also request a replacement through the same process. Contact customer service, explain the damage, and they will send you a new card with the same balance and account number.
Transferring funds or closing your account
If your card is expiring or you no longer need it, you have options for what to do with the remaining balance. Some card issuers allow you to transfer funds to a bank account you own. Log into your account online or call customer service to request a bank transfer. You will need to provide your bank account number and routing number. The transfer usually takes 3 to 5 business days.
Alternatively, you can spend down the remaining balance by making purchases or withdrawing cash at an ATM. If a small balance remains and you cannot spend it, contact the issuer to ask about their policy for unused funds. Some issuers donate unclaimed balances to charity, while others hold the funds for a set period before closing the account.
To close your account formally, call customer service and request account closure. The representative will confirm your remaining balance and explain how those funds will be handled. Once the account is closed, you cannot use the card.
Frequently Asked Questions
Can I use my prepaid award card internationally?
Most prepaid award cards work at merchants and ATMs outside the United States if they display the Visa or Mastercard logo. However, you will likely be charged a foreign transaction fee (typically 2 to 3 percent of the purchase amount) and an ATM fee if you withdraw cash. Check your card's terms before travelling to understand the exact fees.
What happens if I forget my PIN?
Call the customer service number on the back of your card and tell the representative you have forgotten your PIN. They will verify your identity and either reset your PIN or send you a temporary one. You can then change it to a new number you will remember.
Can I reload money onto my prepaid award card?
This depends on the card issuer and the type of card. Some prepaid award cards are one-time use only and cannot be reloaded. Others allow you to add funds through direct deposit, bank transfer, or at retail locations. Check your card's terms or contact customer service to find out whether reloading is an option.
Is my money protected if the card issuer goes out of business?
Most prepaid award cards issued by banks are protected by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per account. However, cards issued by non-bank companies may not have this protection. Review your card's terms or contact the issuer to confirm what protections explore to your specific card.
Why was my card declined at a store?
Your card may be declined if the balance is too low to cover the purchase, the card has expired, you entered the wrong PIN, the merchant does not accept that card brand, or the issuer has frozen the account due to suspicious activity. Check your balance online or call customer service to find out why the decline occurred.