You pay, in advance, and it retains the memory for telephone time to be used later. As you use the telecard, the time is deducted until it is used up at which time the card expires.
Some cards are disposable and some are re-chargable.
The basic concept is to enable people to make phone calls when away from home, without the need to carry coins. This is another step towards a 'cashless' society and a Global monetary system. As the World shrinks through instant communication, methods of communication must change. Surcharges are eliminated when the cost of the company's credit department is eliminated. There is no longer need for extension of credit, expense of collections, or losses incurred with non-payment.