Prepaid debit cards are gaining in popularity: here are reasons why
Rising trend in the sphere of noncash payments is prepaid debit card. Number of people preferring to use prepaid cards for making purchases and payments is constantly growing. Prepaid debit cards combine simplicity of cash and advantages of debit cards, opening broad possibilities for customers. In comparison to cash prepaid cards are more reliable and more convenient than cheques. Here are simple reasons more and more people choose prepaid cards.
You do not need to have bank account
The main difference between prepaid debit card and credit card is that you have no need to open and maintain bank account. If you would like to obtain credit card, it required additional credit check of the applicant. You also need to have good credit score. To have prepaid card you don’t need to pass additional
Also in case of credit cards the issuer of the card (bank) decides which credit limit you will have. This is not very convenient if you need higher limit. For prepaid cards you decide how much money there will be.
As it was mentioned prepaid cards are not linked to bank account. So if you are afraid to use your debit / credit card online, as fraudsters can obtain your bank account details, you can use prepaid cards. Even if your prepaid card details are stolen, maximum you can lose is remaining balance on your card, but not your bank account details.
On the other hand, in most cases there is no protection in case of prepaid card losses. If you buy stuff online with a prepaid card and it fails to be delivered to you or you receive not what you have ordered you will probably have to chase the retailer, not prepaid card issuer. To protect yourself you can choose Visa-backed prepaid card which has Chargeback system.
Control your spending
When going abroad you can always use prepaid card. Mainly cards go in 3 currencies - dollars, euro and sterlings. This is even more convenient as you can pay with one of these currencies almost everywhere where cards are accepted.
Prepaid cards can be pre-loaded or loaded on demand. Latter option can be very helpful especially when you want to monitor spendings of your kids going on school trips. They might require some amount for spending and here prepaid debit card can be a very convenient solution. If you want to prevent spending all funds in one day, you can use option of loading card gradually. You can load card daily instead of pre-loading whole amount at once.