What is a Card-Based Stored Value Card?

A Card-Based Stored Value Card is designed as a prepaid card that has a monetary value stored on it, which can be used for purchases up to the amount loaded onto the card. This type of card differs from credit or debit cards because it does not draw funds from a bank account or establish a line of credit. Instead, users load a specific amount onto the card beforehand, allowing for a controlled spending limit.

This card can be utilized for various transactions, including retail purchases or online payments, acting just like a traditional payment method while promoting better budgeting since users cannot exceed the amount preloaded. The stored value nature makes it an excellent option for gifts, incentives, or specific spending purposes, such as travel or corporate incentives.

The other options, while related to card-based transactions, do not capture the essence of a Card-Based Stored Value Card. For instance, credit cards and debit cards are linked to accounts that allow for borrowing or direct debiting, whereas loyalty cards accrue points and are not primarily used for monetary transactions.