Yes, but most card issuers block it, and the ones that allow it charge you fees on both ends
You can technically purchase a prepaid card using a credit card at some retailers and online, but the transaction usually costs more than it should. Most major credit card networks — Visa, Mastercard, American Express — treat prepaid card purchases as cash advances, which means your issuer charges you a cash advance fee (typically 3 to 5 percent of the amount) plus a higher interest rate starting when ready, with no grace period. Even if a retailer lets you buy a prepaid card with your credit card, you are paying to move money from one card to another, which defeats the purpose of either card.
The second cost comes from the prepaid card itself. Most prepaid cards charge monthly maintenance fees, set up fees, or per-transaction fees. Stacking a credit card cash advance fee on top of those prepaid card fees means you are paying 5 to 10 percent just to load money onto a card you will then pay to use.
Key Takeaways
- Credit card issuers classify prepaid card purchases as cash advances, which carry fees of 3 to 5 percent and higher interest rates with no grace period.
- Even retailers that accept credit cards for prepaid card sales will process the transaction as a cash advance, not a regular purchase.
- The cheapest way to load a prepaid card is with a debit card, bank transfer, or cash at a retail location — not a credit card.
- If you need a prepaid card for budgeting or spending control, loading it with a credit card defeats that purpose because you are borrowing money at a high cost.
- Some credit cards offer rewards on cash advances, but the fee and interest rate almost always exceed any reward value.
Why credit card issuers treat prepaid cards as cash advances
A cash advance is any transaction that gives you cash or cash-like funds rather than paying a merchant for goods or services. When you buy a prepaid card, you are moving credit into a separate account that functions like cash — you can withdraw it or spend it anywhere that card is accepted. Your credit card issuer sees this as you taking out a loan against your credit line, not as a purchase.
This classification matters because cash advances have worse terms than regular purchases. You pay the cash advance fee upfront (calculated as a percentage of the amount), and interest accrues from the transaction date forward — there is no 21-day grace period like there is for regular purchases. If you load $500 onto a prepaid card at a 5 percent cash advance fee, you owe $25 when ready, plus interest on the full $500 starting that day.
Where you can and cannot buy prepaid cards with a credit card
Most major retailers — Walmart, Target, CVS, Walgreens — sell prepaid cards at checkout and will accept a credit card as payment. However, the transaction still processes as a cash advance on your credit card statement, even though the retailer does not know or care how you are paying. The retailer sees a normal sale; your credit card issuer sees a cash advance.
Online prepaid card providers vary. Some allow credit card loading directly; others require a bank account or debit card. If an online provider does accept your credit card, check your credit card statement afterward — it will likely show as a cash advance. A few prepaid card companies (mainly those marketed for international travel or business) may code the transaction differently, but this is rare and you should verify with your card issuer before purchasing.
One exception: some credit cards offer a 0 percent cash advance rate for a limited time as a promotional offer. Even with this offer, you still pay the cash advance fee upfront, so you are not saving money overall — you are just delaying interest charges.
The actual cost of loading a prepaid card with credit
Let's say you want to load $500 onto a prepaid card using a credit card that charges a 5 percent cash advance fee and a 25 percent annual interest rate. Here is what you pay:
- Cash advance fee: $25 (5 percent of $500)
- Interest for one month (if you pay it off in 30 days): approximately $10.42
- Prepaid card monthly fee (if applicable): $5 to $15
- Total cost: $40 to $50 to move $500
Compare this to loading the same prepaid card with a debit card or bank transfer, which costs nothing or a flat $1 to $2 fee. The credit card route costs 20 to 50 times more.
If you carry the balance longer than a month, the interest compounds and the cost climbs. At a 25 percent annual rate, carrying $500 for three months costs roughly $31 in interest alone, plus the $25 cash advance fee and prepaid card fees.
Better ways to load a prepaid card
If you need a prepaid card for budgeting, travel, or spending control, use a debit card, bank transfer, or cash to load it. Most prepaid cards accept all three methods and charge nothing or a small flat fee. Some banks offer free prepaid cards to their customers and let you load them from your checking account with no fee at all.
If you do not have a debit card or bank account, ask the prepaid card issuer whether you can load it in person at a retail location using cash. Many prepaid cards sold at Walmart, Target, and similar stores can be loaded at those same locations for free or a small fee.
If you are considering a credit card cash advance for any reason — whether to load a prepaid card, get cash, or cover an emergency — explore alternatives first. A personal loan, credit union loan, or line of credit usually has a lower interest rate than a credit card cash advance. If you are in a financial emergency, contact a nonprofit credit counselor through the National Foundation for Credit Counseling (NFCC) to discuss options.
When someone might still use a credit card to buy a prepaid card
There are narrow situations where the credit card route makes sense, though they are rare. If your credit card offers a rewards rate on cash advances (some business cards do) and the rewards rate exceeds the cash advance fee, you might come out slightly ahead. For example, a 5 percent cash back rate on a 3 percent cash advance fee nets you 2 percent gain. However, you still pay interest on the balance unless you pay it off when ready, which usually erases the reward value.
Another scenario: you are traveling internationally and your debit card does not work, but your credit card does. In that case, buying a prepaid card with your credit card might be your only option to access funds. Even then, you are paying for the privilege, so use it only if you have no other choice.
A third situation is fraud protection. If you are concerned about using your debit card online or in an unfamiliar place, a prepaid card funded by credit card might feel safer because the credit card company's fraud protections explore to the initial transaction. However, this is a weak reason to pay 5 to 10 percent in fees — most debit cards and prepaid cards have fraud protections too.
What happens to your credit score when you buy a prepaid card with a credit card
A cash advance does not hurt your credit score directly, but it can indirectly. If the cash advance pushes your credit utilization ratio higher (the percentage of your available credit you are using), your score may drop slightly. More importantly, if you carry the balance and miss a payment, your score takes a significant hit.
Cash advances also do not earn rewards points on most credit cards, so you get no benefit to offset the fees and interest. Regular purchases earn points or cash back; cash advances do not.
Frequently Asked Questions
Will my credit card issuer let me buy a prepaid card?
Most will, but they will charge you a cash advance fee and interest. Some issuers may decline the transaction if they detect a pattern of cash advances, viewing it as a sign of financial stress. If your card is declined, contact your issuer to ask why — it may be a fraud block rather than a policy block.
Can I use a credit card to load a prepaid card online?
Some prepaid card websites accept credit cards for loading, but the transaction will still process as a cash advance on your credit card statement. Check the prepaid card issuer's website for accepted payment methods before you try. Most recommend debit card or bank transfer instead.
Is there a prepaid card that does not charge fees if I load it with a credit card?
No. The fee comes from your credit card issuer (the cash advance fee), not the prepaid card company. Even if the prepaid card itself has no monthly fee, you still pay the credit card cash advance fee. The only way to avoid it is to load the prepaid card with a debit card, bank transfer, or cash.
What if I need cash and my debit card is not working?
A credit card cash advance at an ATM is cheaper than buying a prepaid card with a credit card if you only need the money once. ATM cash advances usually charge the same fee (3 to 5 percent) but you avoid the prepaid card fees. If you need ongoing access to funds, ask your bank to reissue your debit card or use a mobile payment app like Venmo or PayPal instead.
Do rewards points make up for the cash advance fee?
Rarely. If your card offers 5 percent cash back on cash advances and charges a 3 percent fee, you net 2 percent. But you still owe interest on the balance starting when ready, which costs far more than 2 percent unless you pay it off within days. The math only works if you pay the full balance before interest accrues, which defeats the purpose of using credit.