Do PrePaid Cards have a Credit Allowance?

If you have heard about prepaid cards, then you would know that you can load funds into your card and use the card for withdrawals at ATMs or make purchases at retail shops. However, do you have a credit facility if you’re using Prepaid cards? Let’s find out.

Do prepaid cards build credit?

No, they don’t. This is because a prepaid credit card works like a gift or debit card and isn’t connected to credit bureaus. You don’t undergo credit checks because there is no allowance for credit. You can only spend the amount of funds you have put in, and once the funds are finished, you can’t use the card until you load cash in again.

Functions of a prepaid card?

1. Alternative to traditional banks:

You don’t need to set up an account with traditional banks. You can save and make purchases just like you would with your bank account.

2. Cashless transactions:

You don’t need to go around with cash when can conveniently go with your prepaid card to make online and offline purchases. A prepaid credit card can be used anywhere the card’s payment

3. Poor Creditworthiness:

If you can’t open a bank account because of a poor credit score, then a prepaid card is the best option. After all, you can’t access credit with the card.

4. Minor User:

If you haven’t been added as a user on a credit card or you can’t set up the manner of account you need because of your age, then you can begin spending with a prepaid card until you turn 18 and can get the kind of account you want.

5. Improve your budgeting:

With credit cards, there is a tendency to spend above your worth because you’re relying on the fact that you can pay back later. However, in many situations, you end up going into overdraft while purchasing things that aren’t even important.

6. Send and receive money:

You can receive your wages with Prepaid cards/ You can also send money to friends and family members using this card. Similarly, you can use it for shopping and daily purchases.

7. You want protection against losses:

When you save money or spend with prepaid cards, you have some form of protection if the prepaid company goes under. However, if there is an unauthorized charge on your account, probably because it was stolen or lost, then you must report it immediately. You will be liable for $50 based 0n federal rules. However, you will only enjoy these protections if your card is registered with the issuer of the cards.


Suits Me®, offers a prepaid debit card that helps you to manage your funds and improve your credit score. However, like other prepaid cards, it doesn’t have a credit facility, meaning that you can only spend the funds within the card, after which you can’t use the card until you send more funds into it and have a balance to spend again.