Want to know more about prepaid cards

Prepaid debit cards are a convenient solution for anyone who can't get a credit card. In this economy, more and more people have maxed out their credit cards or can't get a credit card at an affordable interest rate. Prepaid cards have the Visa or MasterCard logo and are accepted worldwide just like credit cards. If you have bad credit or a lack of a credit history, you can still get a prepaid card with no credit check and no approval process other than an identity check.

Something like credit cards were around at the end of the 19th century. And actual 'credit cards' have been around since the 1950s.  In the 1970s the first rudimentary ATM machines arrived and the cards used for ATM use were limited to the function of withdrawing money from a checking account. They could not be used for purchases. Debit cards came about in the 80s as a check alternative at the point of sale. Over the past few years, 'prepaid cards' issued by banks have become more and more popular. They work like traditional debit cards, but are not connected to a checking or savings account.In fact, the lines are blurring between the two forms of payment. When someone pulls out a plastic card you can't really tell what it is even if you see the MasterCard or Visa logo. If you look closely, however, you might see the word debit under the logo.

A debit card can be used to buy gas, eat in a restaurant, or pay for something online or in a store. Also, the cardholder may conduct the transaction using a signature, or by entering a debit PIN number on a keypad at checkout. Signature payments run on a credit card network. PIN payments runs on a debit network. Merchants pay a fee in either case for using the debit network. These swipe fees are a bit lower for PIN transactions. That is why retailers like Best Buy encourage debit cardholders to pay with a PIN.When you make purchases with a credit card do you realize that you are essentially borrowing money using a line of credit? It's a loan that you will eventually have to pay back, and it is very easy to go into credit card debt.  In contrast, debit card purchases are not a form of borrowing. You are merely spending your own money that you prepaid by putting it on your card ahead of time.

What are the real differences between prepaid debit cards, bank debit cards, and gift cards? The differences are behind the scenes on the technical level and the fee structure level. Debit cards are tied to a savings or checking account so the money 'on your card' is drawn from those accounts. These cards are also commonly called checkcards or just traditional debit cards. This may well change but for now there are not usually fees associated with purchases, or when using an ATM in your bank's own ATM network. Prepaid card are not tied to a bank account. They stand alone and you can expect to pay a small fee ($1 for example) with every purchase. Also you will likely pay a monthly maintenance fee ($4 for example).  Gift cards typically are tied to an individual store and can't be used at other places, and they won't bear the Visa or MasterCard logo.

A prepaid card represent a good choice for anyone who wants a traditional debit card but is having trouble establishing a checking account.

David Pratt works for MiCash Inc. and blogs about prepaid credit cards (more correctly known as prepaid cards) and is also the Prepaid Card Man.

How do you use a vanilla mastercard gift card?

I got one for Christmas and I don't know what to do with it.

Answer
It should already be preloaded with cash. So you can use it just like a gift card, but at any store that takes Mastercard.