Prepaid Card – An Alternative To Credit And Debit Cards


debit card

When it comes to card products for financial needs, most Malaysians would instantly think of credit or debit cards. What many people may not know is that there is a third type of card product that enables users to pay by plastic using a preloading mechanism.

We examined these prepaid cards further to reveal how they can be used in your daily lives.

What is it?

A prepaid card is a card product that allows you to purchase goods with plastic, very much like a conventional credit card. The major difference lies in the fact that you have to “load” the card with money prior to using it. The concept is very similar to a prepaid account offered by mobile telecommunication service providers.

How it works? 

It is an instrument to store monetary value. Money can be loaded into the card at any bank branch or at any Automated Teller Machine (ATM). In Malaysia, the maximum amount you can load into one is usually RM10,000.

When money is loaded, cardholders can begin making purchases using the card. The act of making a transaction using one is exactly like how a credit card works. You simply look for counters with the Visa or MasterCard sign (depending on which type of card you hold), then have your card inserted through a terminal just as you would a conventional card.

During the purchase, the value of the transaction is deducted directly from the amount stored within the card. In the event that the stored amount within the card reaches zero or isn’t enough to carry out the purchase, the transaction fails.

Additionally, it can also be used to withdraw money which has already been preloaded into the card. This can be carried out for free through any ATM under the issuing bank. For ATMs under other banks, a fee of RM10 is usually charged per withdrawal.

To withdraw preloaded money from a prepaid card, a Personal Identification Number (PIN) is needed. Usually, this PIN is mailed to the cardholder a few weeks following successful registration.

How to keep track of your spending with it? 

Just like a normal credit card, a statement listing out the details of purchases made on the prepaid card is made available to the cardholder online or by mail on a monthly basis. Depending on the bank or the card issuing company, the statement may be free or may come with a monthly charge.

How do you get one? 

Most banks in Malaysia offer them. To get one, simply approach any bank and enquire at the service desk.

Alternatively, if you’re looking for a conventional credit card, you can start comparing and making your credit card application online using our credit card comparison table.

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