The main difference between a Visa gift card and a Visa credit card is that the gift card is preloaded with a specific amount of money, and the card cannot have more money added to it once the initial balance is spent, according to Visa. All credit cards, however, have a preset spending limit that cannot be exceeded once reached but can be paid down, which allows the card to be used again.
Credit cards act as loans with spending limits, states U.S. Bank. If a Visa credit card has a credit limit of $2,500, the owner of that card may use it to make purchases, withdraw money or transfer balances up to $2,500. Once the credit limit is reached, the card cannot be used again until the balance is paid back. All credit cards, including Visa cards, have a minimum monthly payment the card owner must make to pay the card issuer back, and interest rates are applied to unpaid balances.
A Visa gift card, also known as a prepaid card, is different from a credit card because the person who purchases the Visa gift card determines how much the card is worth, Visa explains. An example would be a Visa gift card purchased for $100. The person who receives the card can use it to make $100 worth of purchases. Once the $100 is spent, the card cannot have more money added to it, and it cannot be used to make any further purchases. Visa gift cards also cannot be used for cash advances or to transfer balances from other cards.