Die Prepaidkarte liegt neben dem Handy.

Die is the definite article, meaning the. In this sentence, it shows that Prepaidkarte is a feminine singular noun.

So:

• die Prepaidkarte = the prepaid card

German articles carry more information than English the. They can show gender, number, and case.

German very often combines nouns into a single compound word.

• Prepaid
  • Karte → Prepaidkarte

This is completely normal in German. English often keeps such things as two words, but German usually joins them.

The last part of the compound is the main noun, so Karte is the core word. That is why the whole noun is feminine, because die Karte is feminine.

German often uses different verbs depending on how something is positioned.

• liegen = to lie, to be lying, to be located horizontally
• stehen = to stand
• sitzen = to sit
• sein = to be

So Die Prepaidkarte liegt neben dem Handy sounds natural because a card is seen as something that is lying somewhere.

In English, we often just say is, but German prefers a more specific verb here.

For example:

• Das Buch liegt auf dem Tisch. = The book is lying on the table.
• Die Flasche steht auf dem Tisch. = The bottle is standing on the table.

Because this sentence describes a location, not movement.

The preposition neben can take two cases:

• dative for location: where something is
• accusative for movement toward somewhere

Here, the prepaid card is already next to the phone, so we use dative:

• neben dem Handy = next to the phone

If there were movement, you would use accusative:

• Ich lege die Prepaidkarte neben das Handy. = I put the prepaid card next to the phone.

So:

• liegt neben dem Handy = is next to the phone
• lege ... neben das Handy = put ... next to the phone

Dem Handy is dative singular.

It is dative because neben uses the dative when it describes a fixed location. Since the sentence tells us where the card is, not where it is moving, the noun after neben is in the dative.

Also, Handy is a neuter noun:

• nominative: das Handy
• dative: dem Handy

That is why das Handy changes to dem Handy.

Yes. In German, das Handy means mobile phone / cell phone.

This can be confusing for English speakers because handy in English is an adjective meaning useful or convenient. In German, though, Handy is a noun.

Its grammatical gender is neuter, so the basic form is:

• das Handy

Like many German noun genders, this is something you usually just learn together with the noun.

This is standard German main-clause word order.

• Die Prepaidkarte = subject
• liegt = verb
• neben dem Handy = prepositional phrase

In a normal statement, the conjugated verb usually comes in second position:

• Die Prepaidkarte liegt neben dem Handy.

You could move another part to the front for emphasis, but then the verb still stays second:

• Neben dem Handy liegt die Prepaidkarte.

That version means the same thing, but it puts more focus on the location.

Because all nouns are capitalized in German.

So in this sentence:

• Prepaidkarte is a noun
• Handy is a noun

That is why both begin with capital letters. This is one of the most noticeable differences from English spelling.

Liegt is pronounced roughly like leegt.

A few helpful points:

• ie in German is usually a long ee sound
• g at the end of a word can sound a bit softer than English speakers expect, depending on accent

So liegt sounds close to leekt or leegt, but with a clear long vowel.

Yes, sometimes you may see a hyphen in longer or more modern compounds, especially with imported elements like Prepaid.

So both of these can appear:

• Prepaidkarte
• Prepaid-Karte

The solid compound Prepaidkarte is very normal and fully correct. The hyphenated form can sometimes make the word easier to read, but in many standard contexts, the one-word version is preferred.

Usually, yes, if the card is simply resting somewhere.

A flat object such as a card, paper, or book is commonly described with liegen:

• Die Karte liegt auf dem Tisch.
• Der Brief liegt neben dem Computer.

But in some contexts, Germans may choose a different expression depending on perspective:

• Da ist eine Karte neben dem Handy. = There is a card next to the phone.

That is also possible, but liegt is the more natural choice when talking about the position of a physical object like this.