In the 1990s, credit card companies incurred heavy losses because of many credit card users defaulted on their payments. Thus, credit card companies had to come up with a new way to collect debts. It was during this period that credit card companies began offering secured credit cards and prepaid debit cards. Today, most credit card companies such as Visa, Mastercard and American Express issue prepaid debit cards.

Prepaid debit cards are also known as stored-value cards. Prepaid debit cards are reloadable (add money repeatedly) that allow you to only spend up to the amount you have pre-deposited into the account. If you tend to overspend or would like to control your spending then prepaid cash cards could be a good card for you. Other than that, prepaid cash cards will be helpful if you are having trouble getting approved for a credit card due to poor or no credit, and allow you to build or re-build your credit. You can only spend the amount you deposit into your account. Typical applications of stored-value cards include ATM cards, transit system, telephone prepaid calling cards etc.

The Concept
A prepaid debit card works similar to a prepaid phone card. You purchase a prepaid debit card by paying the amount you want as your limit. You can add funds to your prepaid debit card at a retail location or an online bank. You use the prepaid debit card like you would use a credit card. The only difference is that the transaction amount is deducted automatically from your prepaid debit card. You can keep using the prepaid debit card until the balance reaches zero.

In Malaysia, we have Touch N' Go cards, mobile phone prepaid cards such as Hotlink,Celcom, Digi etc. These card services had attracted attention of many users and are being popular as method of payment rather than paying cash on every purchase.

Advantages:

1.You do not need to carry a lot of cash with you every time you go out.
2.If you travel frequently, you can use your prepaid debit card in countries where your card's issuing company provides this service. Mastercard, American Express and Visa all issue prepaid debit cards that you can use in many countries. Banks have also started issuing prepad debit cards to their clients.
3.With it, you won't have to worry about monthly credit card bills and missing credit card payments each month.
4.You can easily reload or add funds to your prepaid debit card. You can do this by calling the issuing company and authorizing them to transfer funds to your prepaid credit card or getting online and doing the transfer yourself.

Related links:
http://www.credit-card-surplus.com/prepaid.php
http://en.wikipedia.org/wiki/Octopus_card#Types_of_cards
http://ezinearticles.com/?What-is-a-Prepaid-Debit-Card-And-What-Are-Its-Advantages-and-Disadvantages?&id=333602