What Is a Stored Value Card?

A stored value card is a type of card that is commonly used in the financial industry today. With this type of card, a monetary balance is stored on the card instead of in a financial system. The card has a special strip on it that keeps track of important financial information such as the balance on the card. Here are the basics of stored value cards and how they are used.

Stored Value Cards

With this type of card, all of the information pertaining to the financial balance of the account is stored on the card itself. This is different from a debit card or another type of card that keeps the information about the account balance in a financial system and the card is only used to access the account. This puts a lot of importance on the card itself in this type of system. If the card is lost, anyone could potentially access the money on the account.

Gift Cards

One of the most common examples of a stored value card is a prepaid gift card. These gift cards are available at most retail merchants across the world. With this type of card, an individual can go into a retail establishment, give the cashier certain amount of money and then get a card with that amount of money deposited onto it. The card can then be used by anyone to purchase goods at the store.

Public Transportation

This type of card is also frequently used with public transportation. Many cities have cards that individuals can buy that have a certain amount of fare on them. Individuals can use these cards to travel on subways or buses in order to avoid having to use cash when they are trying to get on the public transportation.

Phone Cards

Phone cards are another good example of a stored value card. With a phone card, an individual pays a certain amount of money for the card. Then that card will provide the user with a certain number of phone minutes to use. The individual can then type in the numbers on the card into a telephone. The telephone call will then be charged to the phone card.


Even though this type of card offers a great deal of convenience to the user, there are some problems associated with stored value cards. For one thing, there is growing concern that drug trafficking is being promoted with the use of stored value cards. By using a prepaid debit card, an individual can put a great deal of cash onto the card. He or she can then go across international borders with the card without any issues. This allows drug traffickers to take large amounts of money with them across the border.

Another potential problem with this system is that the user has to retain possession of the card. If the card is lost, there is not much that can be done to get it back.