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Stored-value card

A stored-value card represents money on deposit with the issuer, not unlike a debit card. One major difference between stored value cards and debit cards is that debit cards are usually issued in the name of individual account holders, while stored value cards are usually anonymous. The term stored-value card is usually a misnomer, as most indicia of the cards' value are maintained on computers affiliated with the card issuer.

The value associated with the card can be accessed using a magnetic stripe embedded in the card, on which the card number is encoded; using radio-frequency identification (RFID); or by entering a code number, printed on the card, into a telephone or other numeric keypad.

Typical applications of stored-value cards include:

Transit system "farecards"; Gift cards; Telephone prepaid calling cards.

Transit system farecards are popular with passengers because they eliminate the need to fumble with money when entering (or exiting) buses, subway trains, etc.

Many transit system operators have implemented farecards because they can accurately track system usage; they are useful for charging different fares depending on the distance traveled; they can automatically discount fares for seniors and persons with disabilities; and passengers can in some cases replace them if they are lost, stolen, or damaged.

Gift cards have all but replaced gift certificates, can be purchased in various values, and are good at various shopping, dining, and entertainment establishments. They are usually anonymous and no refund is available if they are lost or stolen. Also, issuers profit from the interest or float that is earned between the time of purchase and the time of use.

See also: Telephone prepaid calling card