Prepaid and Virtual Card Settlement Payments: How They Work

A prepaid or virtual card settlement payment is a card loaded with your settlement amount that you can spend like a debit card, usually online. Virtual cards arrive by email with a card number, expiration date and security code. Physical prepaid cards arrive by mail. Either way, read the terms right away, because these cards often expire and some charge fees after a period of inactivity.

Why settlements use cards

Administrators like cards because they're cheap to issue and quick to send. For class members, they can be faster than waiting for a check. Some settlements offer a card as one option among several on the claim form, and a few use a card as the default electronic method. Compare the alternatives in settlement payment methods.

How to use a virtual card

1. 1Open the email from the settlement administrator or the card provider it names, and follow the link to view or activate your card.
2. 2Note the card number, expiration date, security code and balance. Store them securely.
3. 3Use the card for online purchases like any debit card. Some virtual cards can be added to a mobile wallet for in-store use.
4. 4Check the balance before larger purchases, since a purchase above your balance may be declined.

Moving the money to your bank

Some card programs let you transfer the balance to a bank account, sometimes for a fee. Others don't. If transferring isn't available, you might use the card to pay a bill that accepts debit cards, such as a utility or phone bill, which effectively turns the balance into cash you'd have spent anyway. Check the card terms for what's allowed.

Tips to avoid losing your balance

• ✓Act quickly. Activation links and cards can expire. Use the balance within the allowed period.
• ✓Watch for inactivity fees. Some cards start charging after months without use.
• ✓Spend the odd remainder. Small leftover balances are easy to forget. Use them on a purchase where you can split payment, or on a bill.
• ✓Keep the email. You may need it to access the card again or contact support.

Is the email real?

Card payment emails are a common target for impersonation. Before clicking, confirm you actually filed a claim in that settlement and chose a card or electronic payment. Compare the sender and link with the settlement website in your notice. Real card emails won't ask for your bank password or a fee. If in doubt, go directly to the official settlement website and use its contact details. See how to verify a settlement email.

When something goes wrong

• ✓Card declined: Check the balance and whether the merchant accepts that card network. Some merchants don't accept prepaid cards for certain purchases.
• ✓Card expired: Contact the card provider or settlement administrator to ask whether the funds can be reissued.
• ✓Never received the email: Search spam and promotions folders, then contact the administrator with your claim ID.
• ✓Wrong amount: Payments are often pro rata, so the final amount may differ from estimates. See why your payment was less than expected.

Can you choose something else?

If the claim form offers alternatives, you can usually pick a check, PayPal or direct deposit instead. If you're unhappy with a card you've already received, ask the administrator whether a different method is available. Policies vary by settlement.

Physical prepaid cards

If a settlement mails a physical prepaid card, it usually arrives in a plain envelope that's easy to mistake for junk mail. Open unexpected envelopes from administrators carefully. A physical card may need to be activated by phone or online before use, and it may let you withdraw cash at an ATM, sometimes for a fee. Sign the back, keep the card with your other payment cards, and treat it like cash. If it's lost or stolen, report it to the card provider using the number in the card materials.

Payment is the last step. Getting to it starts with filing on time, and SettleScout tracks deadlines for the settlements that match the brands you use and reminds you before each one closes.