5 Reloadable Prepaid Card Basics to Keep in Mind
While a reloadable prepaid card shares a lot of surface similarities with credit and debit cards, it is in a league all its own. That being said, it is not surprising why the reloadable prepaid card market has exploded massively.
In fact, in 2010 alone, reloadable prepaid cardholders have loaded as much as $40.85 billion onto their cards. In a study conducted by Mercator Advisory Group, it was discovered that reloadable prepaid card usage rose by as much as 43 percent in 2010 compared to the year prior.
Loading money onto a reloadable prepaid card can be done in several ways and can vary from one issuer to another. Some of the common loading options however include direct deposits, bank transfer, and through a secure online portal. Most reloadable prepaid cards are also affiliated with huge and seasoned financial institutions and card networks.
If you are considering using a reloadable prepaid card, below are 5 of the key things you need to know:
- You will be sharing personal and financial data.
You have to bear in mind that unlike gift cards, reloadable prepaid cards are not cards you can just present at the counter each time you use it for purchase transactions. Also, unlike gift cards, reloadable prepaid cards are designed for long-term use. This also means that for those who would like to obtain one, they need to provide a few financial and personal information.
Oftentimes, applicants will only be required to provide their name, address, birthdate, phone number, and social security number. For those who want to reload their cards using an existing bank account, they will also be asked to provide the bank account number.
- Some cards offer exciting freebies and perks.
Some reloadable prepaid card issuers entice people to patronise their cards by offering perks, freebies, and benefits often enjoyed by credit card users. Case in point: some issuers provide protection for broken, stolen, or lost items purchased using the card within the 90 days from purchase date.
Other perks that are offered include global assistance in the form of medical and legal aide when travelling outside the country.
- Customer service can differ from one provider to another.
While most reloadable prepaid cards are almost similar in terms of appearance and features, they can be very different when it comes to the customer service they offer. For instance, while some issuers provide customer service through human interaction, other issuers offer automated voicemails or email for those with card issues or queries.
- Depending on usage, cost can vary.
While not true for all, some reloadable prepaid cards charge for transactions done using the card like activation, balance inquiry, etc. However, some will only charge for reloading transactions and ATM withdrawals.
That being said, it would be best to review and understand card usage fees so you won’t be caught off guard in terms of the charges.
- Consumer protection provided can differ from one card to another.
Some reloadable prepaid cards are marketed as the ideal alternative to debit or credit cards because they also provide safety regulations often associated with other plastic cards. For instance:
- Some providers provide zero liability in the event of card fraud, loss, or theft.
- Zero liability is provided by some card issuers in the event of any unauthorised card activities.
- Some card providers offer card and balance reimbursement in the event of fraud, theft, or card loss.