Prepaid Debit Cards: Here’s What You Need to Know
Considering getting the best prepaid debit cards available? Join the club! In 2015, more than half of all Americans got themselves the best prepaid debit cards they can get their hands on. That’s a significant rise from only 19 percent of the American population who used prepaid debit cards way back in 2008.
Nowadays, there are more than a dozen different kinds of prepaid debit cards available in the market. If you are not sure what type will best suit your needs and what type to go for, keeping in mind the following basics should help you narrow down your options:
Prepaid cards are more similar to debit than credit cards
While prepaid cards look identical to credit cards and share a few similarities to credit cards in terms of usage, it has no credit capability. That means technically, when used, they function more like debit cards as opposed to credit cards. In other words, you will be spending your own money and not that of the bank.
However, unlike the typical debit card, you don’t need a bank account when using a prepaid card. All you need to do is load money onto the card before you can use it for any purchase transactions. When the balance available on the card has dipped too low or has been depleted, you’ll have to reload money onto the card before you can use it again.
Using prepaid cards are considered by many as an awesome alternative to banks
For a staggering 68 million people in the United States who are without a checking account, prepaid cards are considered the consummate alternative. Why? For starters, they provide ease of usage minus all the hassles often associated with banks.
As of March of 2015, consumers have loaded a total of $7 billion onto their prepaid cards. What’s even more interesting? At least 40 percent of those deposits came from deposited paychecks.
Prepaid cards come with features that cater to the unique needs of consumers
Not everyone may be aware of it but most prepaid cards come with unique and exciting features designed to cater to the various needs of the consumers. For instance, some prepaid cards can be used to pay bills online and even set up automatic monthly payments. Others on the other hand allow users to withdraw cash from ATMs using a designated PIN.
Prepaid cards can help users effectively manage their money
Even for those people who have access to banks, prepaid cards can still be an amazing budgeting tool. This is especially true for people who are looking for an effective budgeting tool to help them manage their spending accordingly.
Case in point: some people load the money allocated for the monthly groceries on the prepaid card and use it strictly for the purchase of groceries. Once the money has been depleted, spending stops automatically as well.
In essence, many of the prepaid cards available in the market are designed to help users manage their spending properly while limiting both risks and costs at the same time.