Do pre-paid cards charge intrest or do they make money off the top?

May 2021 2 14 Report

Do pre-paid cards charge intrest or do they make money off the top?

Can you set limits on the cards and cash them out when you need too or do you get charged for it. I am just wondering hw they work anyone know.

Business & Finance / Credit

Ted

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They make money in two ways:

(1) they are the "issuer" and thus get part of the fee the merchant pays to accept the card at transaction time.

(2) they have your money now so they can invest it and keep the interest earned between now and when you use the card. I know the interest on $100 doesn't sound like much, but if they get half a million cards out there, then they have 50 million to invest.

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