Since they were first introduced, prepaid cards have experienced a meteoric rise. In fact, a study conducted by Pew indicated that prepaid card usage has increased by as much as 50 percent from 2012 to 2014.
Undoubtedly, from the time these innovative financial instruments were first introduced, they have come a long way. Today, prepaid cards have evolved into one of the most popular and well-loved plastic cards available.
Prepaid Card Essentials You Should Know
If you are like many people, you either own a prepaid card already or you are considering getting one. Surprisingly, many who have owned and used a prepaid card are still not that familiar with its many ins and outs.
Fortunately, you have come to the right place. This article will be your easy and quick guide on how to use one of the most ingenious tools available at your disposal. This guide will also help you make the most of your prepaid card.
It’s easy for many people to mistake prepaid cards for other plastic cards like credit and prepaid cards. However, unlike the other two, prepaid cards don’t need to be linked to any savings or checking account.
In other words, prepaid cards have to be preloaded with money before you can use it for purchase transactions and ATM withdrawals. So basically, your prepaid card is considered “empty” unless money has been successfully loaded onto it.
Also, unlike credit cards, you won’t be “borrowing” money from the bank. With credit cards, the bank will pay for the purchase and the cardholder will pay the bank back at a later date. With prepaid cards, you will be using your own money.
The amount of the withdrawal or purchases you will do will be deducted directly from the available balance you have on your card. It is also deducted in real time. As soon as the balance has been depleted, your transactions will be declined for the time being.
However, as soon as you are able to successfully load money onto your card, you will be able to use the card right away for both purchase transactions and ATM withdrawals. You also have different ways to load money on the card.
What to Consider When Getting a Prepaid Card
With so many plastic cards now available, choosing the best one has become tricky for many. Fortunately, you can narrow down the options by asking yourself some essential questions. For example, ask yourself which of the two you prefer: loading through direct deposits or through networks.
If you prefer loading through networks, you should pick a card with a reload network you can easily access. Another consideration would be the charges and fees associated with the card. You need to determine the transactions you often do using the card.
Another consideration would be your patterns in terms of card use. Undoubtedly, it is recommended that you opt for a card that will charge the minimum for the transactions you often do.
Another consideration is easy access to the card. With a prepaid card, you are spared from the hassle of submitting personal and financial information and documents. It’s the exact opposite when it comes to prepaid cards.
Unlike credit cards, obtaining a prepaid card is as easy as can be. You won’t have to submit any financial or confidential documents. Also, since it won’t be tied to any accounts, you won’t have to wait for a long time for the approval.
Lastly, if it’s help with money management that you are after, getting a prepaid card is hands down your best option. Unlike credit cards, you won’t be able to accumulate any debts using your prepaid card and you won’t have to pay exorbitant monthly fees.