Prepaid Cards Debit – How Prepaid Cards Debit Work

Apart from one major difference, Prepaid cards debit work just like credit cards when you are shopping. The difference here is that you spend your own money, which you’ve loaded onto the card in advance, not borrowing funds. This makes them more like debit cards, but you don’t need to have a bank account to use them. Prepaid cards, have a lot of advantages, even though there are some not-so-good sides that you should be aware of too.

How Prepaid Cards Work

Prepaid debit cards (or pay-as-you-go) cards can be gotten from a bank or credit card company or even buy them from the store. Immediately you get your card, you are to load money onto it. Prepaid cards are reloadable, thus you can add money to your account over and again.

Adding Funds to Your Card

You can add money to a debit card when you purchase it. This is because some cards are designed for one-time use and come pre-loaded with funds, or you can add money later, in different ways:

  • Set up direct deposit to the card
  • Go with cash to a retail store that can add funds to your card.
  • Deposit a check with an app that is associated to your card (by taking a photo of the check).
  • Transfer money from your bank account to your prepaid card.

Ensure that you carefully plan your reloads, even though; most prepaid cards charge a fee for reloading. Immediately you add funds to your card, you can spend that money or withdraw it in cash at ATMs.

Shopping or Withdrawing Cash With Your Card

Prepaid cards look and feel just like standard credit card and debit cards. That is, they’re plastic, with a magnetic stripe on the back, and sometimes have a chip for security. Prepaid cards, utilize the MasterCard or Visa payment network, too, just like credit and debit cards.

To purchase an item, all you need to do is, swipe or insert the card into the reader, if you are at a retailer, or type in your card number if you are shopping online. If you are at an ATM, just insert your prepaid card like any other bank card and haveyour cash withdrawn. Note, that you may be charged a fee for every purchase or ATM visit.

Advantages of Using a Prepaid Cards Debit

No bank account needed

No credit history required

Prepaid cards helps you with budgeting.

Offers extra privacy.

Disadvantages of Prepaid Cards Debit

Carries high fees

Can’t help you build credit

Offers fewer protections

No interest

Comes with an expiration date

Overdraft temptation

Limited transactions

Prepaid Cards Debit Alternatives

If you feel a Prepaid card debit is not for you, you may opt for a proper bank-issued debit card and checking account. With this, you can avoid many (if not all) of the bank fees by selecting a fee-free online checking account.

Forthose with a rocky banking history, a regular checking account with fees may still beat out the cost of depending exclusively on prepaid cards for your financial needs.

Be it as it may, if you know you can pay the bill every month, credit cards offer more protections against fraud or abuse, and additionally, you can use them to build credit as well as improve your credit score, which can come in handy in helping you secure better interest rates on loans and mortgages in the future.


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