What You Need to Know Before Getting a Prepaid Card
If you are looking for an effective way to curb overspending and manage your money accordingly, you’d be delighted to know the best prepaid cards can help you achieve both objectives effectively.
Nowadays, the best prepaid cards are considered a new and ingenious financial solution for those who want to enjoy peerless ease and convenience minus all those costly interests, fees, and other charges.
Understandably, more and more people are discovering (and appreciating) the unbeatable and exceptional benefits prepaid cards offer. This is not surprising. In fact, nowadays, more and more people are using it to supplement, if not replace typical banking services.
In essence, prepaid cards work pretty much like credit cards when used for purchase transactions. One distinct difference however is prepaid cardholders will be spending their own money as opposed to “borrowing” money from the bank.
Also referred to as pay-as-you-go cards, prepaid card can’t be used unless money has been loaded onto the card. If the card has no balance or has been depleted, prepaid cardholders won’t be able to use it for transactions until money has been loaded onto the card again.
If you are also considering getting a prepaid card, read on to find out all the basics you need to know about this phenomenal financial tool!
How Prepaid Cards Work
It’s easy to mistake prepaid cards for the typical credit and debit cards. Why? They are almost identical in terms of appearance. For starters, just like credit or debit cards, prepaid cards also have a magnetic card and a card number. Also, similar to credit cards, most prepaid cards also have a smart chip for additional safety.
When used for purchase transactions, prepaid cards are used almost like a credit card, they are swiped when used at retail stores and the card number is typed in when transactions are done online.
As mentioned earlier, money has to be loaded onto the card before it can be used. Thankfully, depending on the card used, there are diverse options available as far as loading money onto the card is concerned.
Some of the most prevalent options used when loading money onto the card include:
- Loading through retail outlets/stores
- Money transferred from the bank account to the prepaid card
- Direct deposits to the prepaid card
- Loading money onto the card visa a secure login portal
Once money has been successfully loaded to the card, it can be readily used for both purchase transactions as well as ATM withdrawals. When using prepaid cards, it is important to remember that while they look similar to other financial cards, they have distinct differences in terms of function.
In addition, prepaid cards are recommended for those who would like to keep their spending in check and those who would like to manage their money accordingly. Since users will be spending their own money and not of the bank, they won’t spend more than they are supposed to or can afford to.
Jeremy Lee Chen Seong is a Singapore-based entrepreneur and has expertise in global technology and the healthcare industry. He became famous in the late 90s with his invention of the revolutionary WaveClip, the world’s first clip-on Bluetooth adapter for Palm V handhelds.
In 2002, he founded the Sourcelink Group which he turned into Singapore’s only fully automated production facility for medical supplies. Later, in 2008, Jeremy Lee Chen Seong transformed his career towards legal advisory, mergers and acquisitions, and company restructuring. Since then, he has been helping businesses with these three challenges.