What is the primary function of a prepaid card in transactions?

A prepaid card primarily functions as a means to make payments upfront for goods and services. This type of card is preloaded with a specific amount of money, which limits the spending to the available balance. Users can use prepaid cards in a variety of transactions, similar to debit and credit cards, but the essential feature is that the funds must be loaded onto the card before it can be used for any purchases. This characteristic makes prepaid cards a popular choice for budgeting, as users cannot spend beyond their preloaded balance, effectively preventing overspending.

While it may also allow for cash withdrawals or other functions, the defining feature is that it is used to pay for items upfront, without the need to borrow or rely on a bank account balance for funds.