Loading Money onto a Credit Card: How It Works

Why load money onto a credit card at all?

There are two very different reasons to load money onto a credit card – and they depend on the type of card. With a prepaid credit card you must top up a balance before you can use it; it works purely on a credit balance. With a traditional credit card (charge or revolving card) you normally settle the monthly statement afterwards – here a deposit is only needed to clear the bill or to build up a voluntary balance.

Such a balance can be handy in certain situations – for example before a longer trip or when a large pre-authorization, such as a rental car deposit, temporarily ties up your available limit.

Prepaid card vs. traditional credit card

The key difference concerns the order of payment and balance:

• Prepaid credit card: you top up a balance and can only spend what is available – topping up is mandatory, going into debt is impossible.
• Charge card: you spend during the month and the full amount is collected later by direct debit – a deposit clears the bill.
• Revolving card: like a charge card, but repayment can be spread into installments (with interest) – a deposit reduces the outstanding balance.

How to make the deposit

In most cases the deposit is made by SEPA transfer from your current account to an account specified by the bank – often with a reference or card number in the payment reference so the payment is clearly assigned to your card.

The exact procedure, the bank details and any payment reference are in your card bank's documents or in online banking. A transfer is usually credited within one to two banking days.

What to watch for

A few points help avoid mistakes and delays:

• State the payment reference or reference number exactly, otherwise the assignment can take time.
• Allow for processing time – a deposited balance is not available immediately.
• A balance is generally not paid interest; a credit card is not a place to invest money.
• Some cards cap the possible balance – ask the bank if in doubt.

Getting a balance paid back out

If you have deposited too much or need the balance back, most providers let you request a transfer back to your reference account. With prepaid cards the remaining balance can, depending on the provider, be obtained via a payout function or when the card is cancelled.

The specific conditions – such as whether a payout is free – differ by card. A look at the price and service overview or a quick question to the provider provides clarity.