How Well Do You Know Your Prepaid Cards?

Prior to prepaid cards, other popular plastic cards are already available like credit and debit cards. Unfortunately, unlike the best prepaid cards, most people don’t have easy access to the first two. Obtaining a credit or debit card is not straightforward. The application process is both tedious and time-consuming.

Before your credit or debit card application is approved, you have to go through a complex screening process. It is also likely that you will be required to submit personal and financial information. On the other hand, obtaining the best prepaid card is as easy and straightforward as can be.

Prepaid cards work like a combination of a checking account and a credit card. Usually, prepaid cards are backed up by bank holding companies and financial institutions that are already established. Just like gift cards, the card needs to have money before it can be used for purchase and ATM transactions.

Once the money has been loaded successfully, the card can be used immediately. Since they are often backed up by established financial institutions, prepaid cards are honored and accepted in most countries where most credit cards are also honored and accepted.

While its usage is similar to credit cards, the financial features of prepaid cards are similar to that of a checking account. Amount of transactions are directly deducted from the balance available on the card. This means your spending will also be limited by the balance that is available on the card.

Prepaid Cards: How Well Do You Know Them?

Prepaid Card Essentials

Prepaid cards are a convenient and effective solution for those individuals with little knowledge of how banks work. Prepaid cards are also considered the best option for those who don’t have easy access to banks or banking services. They are also ideal for those with credit scores that are not desirable.

Through the years, they have also become the best option for many as they provide protection against loss or theft. Prepaid cards are also the ideal option for those who don’t want to carry cash anywhere they go. Moreover, prepaid cards can also be used for ATM withdrawals.

Thanks to all the enticing benefits they offer, prepaid cards have experienced a meteoric rise and have evolved into one of the fastest growing financial tools in the market today.

The Consumer Financial Protection Bureau predicts a 22 percent annual growth in terms of prepaid card users from 2015 to 2020. In addition, it is also expected that the total amount that will be loaded to prepaid cards is expected to double and can reach as much as $116 billion by 2020.

The Enticing Benefits of Using Prepaid Cards

Prepaid cards offer many enticing benefits that are hard to miss. For example, prepaid cards are considered safer than carrying cash. Prepaid cards also have many functionalities that other cards don’t have minus all the costly monthly fees and other charges.

Since they are also backed by established institutions and financial networks, they are also usually honored and accepted by many merchants. You can also easily withdraw money from ATMs that are associated with the financial networks. Prepaid cards can also be loaded in various ways.

Depending on the loading methods offered by the provider, you have the option to pick which one suits you best. Prepaid cards can also be your best ally if you are looking for an effective way to minimize overspending or to adhere to your budget. More importantly, prepaid cards can help ensure you won’t accumulate debts.

Since your transactions and withdrawals are deducted directly from the balance on your card, your spending will be limited. Once the balance has been depleted, spending will be halted for the time being. You can however use the card again once money has been loaded successfully onto the card.