4 Key Things You Need to Know About Prepaid Cards
While it shares a lot of surface similarities with credit cards and are used pretty much like debit cards, the best prepaid cards are actually in a league all its own. That being said, it comes as no surprise when the market for the best prepaid cards exploded tremendously.
As early as 2010, prepaid card users loaded a whopping $40.85 billion onto their reloadable prepaid cards according to the Mercator Advisory Group. The figure was higher by as much as 43 percent compared to last year, according to the same study.
There are various ways to load money onto the prepaid card and loading options will depend primarily on the options set by the issuers. Some of the most common loading alternatives however include direct deposits, bank transfers, and online portals.
Also, most, if not all of the prepaid cards available in the market nowadays are affiliated with robust financial institutions and card networks. If you are one of the money who’s considering getting a prepaid card, below are 4 of the key things you need to keep in mind:
You will share personal and financial data when applying for a card.
Let’s get one thing clear: prepaid cards, while often mistaken for gift cards are actually different. That means unlike gift cards, you can’t use your prepaid cards for one-time purchases.
If anything, prepaid cards are built for long-term use. That being said, users will be asked to provide basic personal and financial information when they apply for a prepaid card.
The good thing is at the most, prepaid card applicants will only be required to provide very basic personal and financial information like name, address, phone number, social security number, and birthdate.
In addition, those who will use their existing bank account to load money onto the prepaid card will most likely be asked to also provide the bank account number.
Some prepaid card providers provide exciting freebies and perks.
Some prepaid card issuers entice prospects and keep their current clients happy by providing benefits, perks, and other freebies that’s often enjoyed by many credit card users.
For example, some prepaid card issuers provide protection for lost and broken items that were purchased using the card. In most cases however, it is required that the transaction is reported within 90 days from purchase date.
Customer service provided can vary from one prepaid card issuer to another.
While it’s safe to assume most prepaid cards come with identical functions, the same can’t be said for the customer service they provide. For instance, while some prepaid card issuers provide customer service with human interaction, others only use email contacts or automated voicemails for those prepaid cardholders with questions or concerns.
Consumer protections can also vary from one provider to another.
While marketed as the consummate alternative to credit or debit cards, some prepaid cards don’t come equipped with the same guaranteed protection. Primarily this is because some of the protections given to credit card users such as responsibility, accountability, and the disclosure act does not apply to prepaid card users.
The amazing thing is many prepaid card adhere to safely regulations that often apply only to credit cards.