aAs expected, there will always be several misconceptions that will float around when it comes to new technologies and tools. While debit and credit cards have been used since the 70s, reloadable prepaid cards are considered the latest among the different types of plastic cards available in the market today.
Since they are considered the new player in the market, it is not surprising that there are many prepaid card myths that are floating around and most people, even reloadable prepaid card users themselves, are not aware of the truths behind them. Below are the truths behind some of the most common prepaid card myths:
Myth #01: Those with bad credit can’t obtain a reloadable prepaid card.
Fortunately, there is no truth to this. Those who use a reloadable prepaid card won’t be borrowing money from the bank or the provider of the prepaid card. Rather, all the transactions done using the card will be deducted directly from the balance that is available on the card.
That said, prepaid card providers won’t be taking into consideration the credit standing of those who would like to avail of prepaid cards. In addition, those who would like to get and use prepaid cards are not required to submit any financial documents or personal information just to get approved.
Myth #02: Gift cards and prepaid cards are the same.
Since they share many superficial similarities, many people often mistake one for the other. However, both are distinctly different from each other. For instance, prepaid cards can be used repeatedly while gift cards are designed to be used only once. Gift cards are also usually sold in stores.
Since gift cards are designed for one time use only, you would need to purchase another one once the card has been used. Reloadable prepaid cards on the other hand can be used repeatedly as long as you load money on the card. Also, unlike gift cards, prepaid cards can be used for purchase transactions and ATM withdrawals.
Myth #03: Only those with zero access to banks can use prepaid cards.
Prepaid cards can be used by almost everyone — parents, travellers, business owners, freelance specialists, college students, business owners, etc. If anything, reloadable prepaid cards are deemed a great financial tool that everyone can use and access.
For individuals who have access to banks, the cards can also function as an easy to get alternative or additional account. The fees and charges of prepaid cards are way lower compared to other plastic cards like debit and credit.
Myth #04 Reloadable prepaid cards can be overdrawn.
If a bank account has an overdraft feature, it is often easier for people to spend beyond the available balance. Thankfully, when using a prepaid card, spending will be limited by the balance available on the card.
No wonder prepaid cards are used by most parents who want to teach their children the value and importance of not spending beyond what they can afford. This also teaches users the value of proper money management.
Myth #05 Reloadable prepaid cards can’t be used to shop online.
For many nowadays, online shopping is one of the best inventions there is. After all, it allows you to purchase whatever it is that you want or need right at the comfort of your very own home. What makes it even better is you can use your prepaid card to pay for your purchases.
This means all you have to do is visit the website where you want to purchase items from, browse through the different options, pay for them using the prepaid card and wait for them to be delivered to your door. Now that’s comfort and convenience that’s truly hard to miss.