Do Prepaid Cards Work for Hotels?

Do Prepaid Cards Work for Hotels?

October 26, 2020         Written By Heaven Speirs

Don’t want to carry cash for an upcoming trip? You could deposit those funds onto a reloadable prepaid card. Before you make that move though, you need to make sure your prepaid card will work in the way you intend it to. Do prepaid cards work for hotels? Are there fees for using a prepaid card at a hotel? We’ll answer those questions and more in this prepaid card travel guide.

Can You Use a Prepaid Card to Reserve a Hotel Room?

Every hotel has its own payment policy. Typically, a debit or credit card is required to reserve a hotel room. If you call to book a room with a prepaid card, the reservation may be declined because of the type of card you’re using however this depends on the specific hotel’s policy.  Some hotels accept prepaid cards for bookings and will treat them the same as a normal credit card.  However, there is an easy trick to use a prepaid card for your hotel room — use a booking engine.  By booking your hotel through a third party travel site that accepts prepaid cards, you can easily use your prepaid card to book your hotel room regardless of the hotel’s actual policy!

Featured Prepaid Card

Top Features:

No late fees or interest charges because this is not a credit card it is a prepaid card.

If you are able to reserve a hotel room with a prepaid card, it will need to have enough funds to cover the security deposit for the room. This is usually more money than what the base cost of the room is. The hotel uses this money to cover damages, movie rentals, and other fees you may incur during your stay. If you leave the room in good condition and do not make any additional purchases, you will get the deposit back, minus the cost of the room.

Top Prepaid Cards for Hotel Stays

LowCards.com has compiled a list of prepaid cards for hotel rooms. Even if these cards do not work for your hotel reservation, you can use them to pay for the room when you arrive. Here are some of our top prepaid card offers:

NetSpend® Visa® Prepaid Card

The NetSpend® Visa® Prepaid Card comes with a mobile check deposit feature and no minimum balance. You can get text alerts, fast funds through direct deposit, and even cash back rewards on this prepaid card. The account requires a $0 to $9.95 monthly fee, depending on how you use the card.

Netspend® All-Access ® Account by MetaBank®

The Netspend® All-Access ® Account by MetaBank® features everything you’d expect from a traditional bank account. You can get overdraft protection, direct deposits, and an optional savings account with up to a 6% annual percentage yield. Withdraw funds without an ATM fee at any Money Pass® ATM.

How to Pay for a Hotel Room with a Prepaid Card

If the hotel you’re staying at does not accept prepaid cards for reservations, you still may be able to use the card for the room. This would happen when you check into the room or check out at the end of your stay.

The hotel chain wants a debit or credit card on file to cover incidental fees, such as damage to the room, pay per view rentals, minibar purchases, etc. But that does not mean they will turn down other payment methods for the room. You still have the option to use cash or a prepaid card to pay for some or all of your hotel stay.

If the hotel requires payment upfront, provide your prepaid card when you check in. Most hotels will provide a final bill at the end of your stay. That is when you would make the payment. Give the receptionist your prepaid card when you turn in your room keys. Make sure to get a receipt noting which card was used for payment.

Do not use the ‘easy checkout’ service that some hotels offer, where you simply leave your keys in the hotel room. If you do this, the card on file will be charged for your stay.

If the hotel charged a security deposit to your credit or debit card, that should fall off within a few days. It may still be active when your prepaid card is charged, but the hold is only temporary. If your funds are not released within four business days, contact the hotel to inquire about the refund. You may need to file a dispute with your bank, depending on how the hotel responds.

Featured Prepaid Card

Top Features:

No late fees or interest charges because this is not a credit card it is a prepaid card.

Are There Fees for Using a Prepaid Card at a Hotel?

There are several fees you might incur for using a prepaid card at a hotel. If your prepaid card has a transaction fee for purchases, that fee will apply to your hotel room just like it would at a retail store. The hotel may also charge a fee for processing the card. They should tell you this upfront before accepting the payment. If the charge you’re making is more than the funds available in your account, you may be charged an over-the-limit fee. The transaction may be denied altogether, which means you will need additional funding to cover your hotel stay.

Be Aware of Your Card’s Daily Transaction Limits

Some prepaid cards have limits on the amount of money you can spend or the number of transactions you can have in a day. Prepaid cards may also have deposit limits, which may be less than the cost of your hotel stay. Make sure you understand the parameters for your prepaid card before you use it for a hotel reservation.

As a backup option, familiarize yourself with the card’s ATM policies. Are ATM withdrawals permitted? Are there ATM fees for withdrawals or balance checks? Is there a daily limit for ATM withdrawals? You may have the option to pull out cash to use for your hotel stay, but these factors will determine how valid that option actually is.

Do Prepaid Cards Have Foreign Transaction Fees?

Some prepaid cards do charge foreign transaction fees. This will only affect you if you’re traveling to another country. A foreign transaction fee applies to any purchases made in another currency. For most credit cards, this is around 3%. For prepaid cards, it may be 4% or higher. Read over your card terms closely before using a prepaid card for non-domestic transactions.

Another Option – Use a Secured Credit Card to Book a Hotel Room

If you’re worried about using a prepaid card to book a hotel room, there is another option out there that may work even better for you. By using a secured credit card for your hotel stay, you could build your credit score and not have to worry about all the discrepancies mentioned above. Here’s how it works:

  • Provide a security deposit that acts as the line of credit for the secured card.
  • Use the secured card for your hotel reservation, just like you would with a credit or debit card.
  • Enjoy your hotel visit, and check out as normal.
  • Pay off the balance on the secured card within the grace period to avoid interest charges.
  • Continue using the secured card for personal transactions, and pay off the balance each month.
  • Boost your credit score and get an even better card offer later on!

A secured credit card is a hybrid between a prepaid card and a credit card. It is an excellent option for people with bad credit, limited credit, or no credit who may otherwise struggle to get a credit card. The card issuers are happy to accept applicants with past credit struggles because they are not out any money for the account. The cardholder provides the line of credit, and issuer reports payments to the credit bureaus.

Of course, this option only makes sense if you have sufficient funds to pay for the security deposit and the cost of your trip. If you only have enough money for the trip, you may end up charging the secured card and not having a way to pay off the balance. This could result in a negative report to the credit bureaus. If you have sufficient funds though, this is a way to build credit while you travel!

Top Secured Cards for Hotels

These secured credit cards work anywhere Mastercard and Visa cards are accepted, including most hotel booking sites, Airbnbs, airlines, car rentals, and more.

Assent Platinum 0% Intro Rate Mastercard Secured Credit Card

The Assent Platinum 0% Intro Rate Mastercard Secured Credit Card is one of the few secured cards with an introductory offer: cardholders receive 0% APR for the first six months that the account is open. It reports to all three major credit bureaus so you begin to establish a credit history.

Merrick Bank Secured Visa® from Merrick Bank

The Merrick Bank Secured Visa® from Merrick Bank offers unsecured credit line increases after just 9 months. That means as long as you make your payments on time, you can get a higher credit line without an extra deposit. The card comes with a free credit score every month, along with fraud coverage and a $36 annual fee.

First Progress Platinum Elite Mastercard® Secured Credit Card

The First Progress Platinum Elite Mastercard® Secured Credit Card is a full-feature Mastercard with fast, easy approval. You can deposit up to $2,000 when you open the account, and the annual fee is only $49. First Progress now offers expedited processing, so you can get your card just in time for your trip.

The information contained within this article was accurate as of October 26, 2020. For up-to-date information on any of the terms, cards or offers mentioned above, visit the issuer's website. Many of the offers on this article are from our affiliate partners, and LowCards.com may be compensated if you take action with any of our affiliate partners.

Review LowCards.com Editor’s Top Cards!

2020 Top Credit Cards by Category
Featured Prepaid Card
NetSpend® Visa® Prepaid Card
EDITOR RATING
Featured Prepaid Card
NetSpend® Visa® Prepaid Card

Applying for this card will securely direct you to the issuer's website.

Top Features: No late fees or interest charges because this is not a credit card it is a prepaid card. 

Featured Secured Card
Assent Platinum 0% Intro Rate Mastercard Secured Credit Card
EDITOR RATING
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Assent Platinum 0% Intro Rate Mastercard Secured Credit Card

Applying for this card will securely direct you to the issuer's website.

Top Features: Intro APR Offer on Purchases

Featured Fair Credit Card
Reflex Mastercard® Credit Card
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Reflex Mastercard® Credit Card

Applying for this card will securely direct you to the issuer's website.

Top Features: All credit types welcome to apply!

Featured Bad Credit Card
First Digital NextGen Mastercard® Credit Card
EDITOR RATING
Featured Bad Credit Card
First Digital NextGen Mastercard® Credit Card

Applying for this card will securely direct you to the issuer's website.

Top Features: Reports to all three credit bureaus, perfect credit not required for approval


heaven

About Heaven Speirs

Heaven Speirs is a contributing writer for LowCards.com. She remains up-to-date with the latest developments in the credit card industry and the financial sector as a whole. Heaven has over 10 years of experience in online journalism, the bulk of which has been focused on personal finance. Heaven attended Oklahoma State University, where she discovered her talent for research and content creation. In her spare time, Heaven enjoys painting, playing poker, and spending time with her husband and three dogs.