What are the main advantages of prepaid cards?

What are the main advantages of prepaid cards?

Last couple of years we have seen a real revolution in the way people choose to pay for things and services as more and more transactions are made by card instead of cash. In the following article we will show you the pros and cons of prepaid cards and then give some advice how to choose the best one for your needs.

Prepaid cards combine the convenience of credit or debit cards, but give you the possibility to set your spending limit according to your budget. Getting this type of card is available to everyone, regardless of credit history or income.

The main difference of credit card is that prepaid credit card has a credit limit based on a security deposit made beforehand. This way such card provides you with the convenience of a credit card without going into debt. You can use it to purchase items and you should load funds before using it, so you never spend more money than you have. These can be effective tools to teach kids about credit cards without allowing them to irresponsibly get charges that they can’t afford, or for those that have a hard time managing their finances and end up with huge amounts of credit card debt.

What are the main advantages of prepaid cards?

    • Widespread use

Prepaid cards are widely accepted and they have even more acceptability than credit cards in some cases. As they are associated with one of the major card networks, like Visa, MasterCard, Discover, American Express, they can be used anywhere those cards are used.

    • Best cards for bad credit

Despite poor credit history or low credit score, it is still possible to get the prepaid card.

    • Various features

Besides the basic ability to make purchases with a card, prepaid cards offer some other features. This kind of cards can be used to get instant cash from almost all the ATM’s and the transactions are secure as every such card is PIN-protected.

    • Reloading is simple

In case you need to put more cash on your card, you should just make a transfer of money from a bank account or financial institution.

    • Easier way to manage your money

When the money is run out, your spending stops automatically and you can’t get into debt. The activity and usage of your prepaid card can be tracked online or by using your phone. This makes it very easy to control all your spending, generate and keep records.

    • High level of protection

Prepaid cards offer the same theft and loss protections as a credit card. If you report the loss or theft of a registered card to the issuer, most will restore your balance and give you a new card. It is no need to worry about card fraud or identity theft, a card of this type could be a good option as they are not linked to your bank account and are PIN-protected.

So you have seen the advantages that prepaid card can give you, however they must be weighed against the disadvantages. The main among which are the various charges of such cards. According to the experts, the average charges nearly $300 in basic fees per year as activation fees for setting up a card, transaction fees for making purchases on the card, bill payment fees, declined transaction fees, inactivity fees, ATM charges for taking cash out and monthly administration fee. However, not all these cards are so expensive. Some of the fees can be relatively low, it depends on the card. For example, the only fee the American Express Prepaid Card charges is $2 for ATM withdrawals.



Hi everyone myself Rakesh and I am a Business Advisor in Infosys and in free time I will share my experience through my blog. you can see in my blog we have provided information on Prepaid Cards, Finance, and Business & Marketing.

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