How to Make Money With Prepaid Cards

Step 1

Examine the cardholder agreement carefully. Avoid buying prepaid cads from retail locations that don't provide you with a detailed contract. Most of the better prepaid cards offer no transaction fees, free ATM usage and other perks. The worst cards charge money on every transaction, charge large ATM fees, have a substantial activation fee and charge you even more money if you attempt to make a transaction that is too large for the card balance to cover.

Step 2

Consider using a prepaid debit card as a means to borrow money from a credit card account without paying cash advance fees. Purchase a prepaid card with another credit card and then take the prepaid card to an ATM and withdraw the funds. Using this method, you can borrow cash at low rates, particularly if the credit card being used is in a 0% introductory period.

Step 3

Avoid paying overdraft fees when using a prepaid debit card. If you are coming close to the card limit, you can empty out the account only with an exact purchase. One way to accomplish this is to buy an item from a store paying only part of it in cash and use the card for the remainder. For example, if you had $2 left on a prepaid card, you could select a $5 item from the store, pay $3 in cash and then use the card to pay the remaining $2.

Step 4

Collect any cash back or rewards points that you may have earned by using the prepaid card and invest them into purchasing new cards. This will earn you a small profit so long as you carefully manage your fees and avoid incurring any penalties. There is no credit check for purchasing most prepaid cards, so you can attain as many of them as you like.