Prepaid card, which is often referred to as prepaid debit card or prepaid credit card, has been around for more than a decade. It was first introduced to the world as a budgeting tool for youngsters, and now it has been used by people from every walk of life, though it is not as popular as credit card.
What Is Prepaid Card & How to Use it?
A prepaid card is a payment card with card number, signature strip and company branding. But it is different from credit card which provides a line of credit or debit card that is linked to a bank account with overdraft facility. As a prepaid card holder, you can’t borrow money or overdraft with it. You can only use the money you have loaded onto it previously, which makes it a “pay before” solution, something like an SIM card.
A prepaid card can be used in the same way as a debit or credit card except that you can’t borrow or overdraft. You can use it for shopping at stores, through telephone, mail order or internet. The money on your card will be taken away immediately when you make purchases and there is no limit to the amount you spend as long as there is enough money on your card. However, if the amount on the card is low, you may have to top up it to continue using. The following reloading ways are available:
• cash top-up at post offices or convenience stores,
• funds transfer from a bank account,
• on-line through an Internet account.
The Benefits of Prepaid Card
Economic recession has done a great deal to the popularity of prepaid cards, since this kind of card bears fewer risks compared with credit cards and debit cards. Prepaid card continue to be popular for good reasons.
1) Easy to get. When applying for a prepaid card, no bank account or credit history is required. This means that you can get a card even if you have poor credit history or bad ratings, making it quite easy to obtain. Your identity, address and phone number are the only info required.
2) Stay in control with no debt or credit risk. Since credit and overdraft facility are not available on prepaid card, there is no fear about overspending or getting into debt trap, thus it forms a good way to budget for yourself.
3) Convenient for travel. For those who are traveling abroad, prepaid card serves as a convenient tool. You can get rid of the risk of bringing too much cash along and the exchange rate offered by card providers is much better. International travelers always exchange cash at airport and street, which are simply too high. Prepaid card can be blocked if it’s lost or stolen during your trip.
4) Serves as a good gift. Compared with vouchers or store gift cards, a MasterCard or Maestro or other branded prepaid card is more widely accepted and more convenient to use.
Why Is Prepaid Card Good for Teenagers?
Some companies issue prepaid cards to applicants as young as 14 years of age. For parents, it serves as the best gift to their teenagers. Since children can only use the amount available on the card, parents don’t have to worry about them overspending or borrowing unnecessary money. This way parents can take the kids under control and the kids will not ruin their credit rating for future conducts.
It is also essential to monitor children’s spending habit. With a prepaid card, parents will know how their children use the card and what they purchase, thus they can help the youngsters to form proper spending habits. With the freedom to use a card on their own, teenagers can also form financial management and other finance related concepts at an early age.
Note: It’s usually free to apply for a prepaid card, but activation fee and monthly service fee will be charged once you add money to the account. Different companies have different policies on fees, so that you need to make a thorough research when looking for the best prepaid card.
To make your selection of prepaid card easier, we list some of top prepaid cards in the following. This is just a quick summary. To see details, simply follow the links below.
Capital One Prepaid MasterCard
With worldwide acceptance, the card is free to purchase and activate. Plus, there is also no monthly fee when you load at least $500 in any transaction cycle ($4.95 if you don’t). Additional features include:
• No credit check required
• One free ATM withdrawal per transaction cycle
• Safe from loss or theft with $0 fraud liability
• Load cash at any participating Western Union Agent location
• Load your pay or benefits checks through direct deposit
For details about the card, check Capital One website.
Upside Visa Prepaid Card
Upside offers one of the best values in the prepaid card arena. It doesn’t charge any fees on activation, purchases and direct deposit. You can also get free cash back at the point-of-sale. Even if you are charged a monthly fee, it is very low (of $0.99 if you load $500 or more each month, otherwise $4.95).
In addition, Upside is the only prepaid card with a true rewards program that gives you cash back. The rewards you will enjoy include:
• Earn 500 points if activating your card online
• Earn 1000 points when signing up for direct deposit
• Earn points worth up to 15% in cash back when shopping online at leading online retailers through the Upside mall
• Earn 3 points every dollar you spend on prepaid cell phone service purchases
• Redeem 2,000 points and get $20 credited directly to your card
To learn more about the card, check Upside website.
American Express Prepaid Card
American Express prepaid card is practically fee-free. While many other prepaid cards charge several fees, the card has no annual fees, monthly fees, recurring fees, overdraft fees, customer service fees and transaction fees. Plus, you will get one free ATM withdrawal per month.
With the card in hand, you have the ability to add money online or by phone, from direct deposit, a bank account or with cash. The card can be used at millions of locations around the world – in stores, online and over the ATMs.
Checking American Express website, you can know more.
Wired Plastic Prepaid Visa Card
With the card, you can make debit (PIN-based) and credit (Signature-based) transactions, check your balance and withdraw cash at an ATM. The card can be used everywhere Visa Debit cards are accepted.
Good Points:
• Whenever you use the card, you are earning points
• Get automatic account activity updates through e-mail
• Add cash to your card with various loan options, like direct deposit, money gram, western union and Visa ReadyLink
Bad Points:
• Various fees are involved, such as activation fee (of $9.95), month fee (of $5.95), PIN transaction fee (of $0.95) and U.S. ATM withdrawal fee (of $1.95).
Check Wired Plastic website to see details.
Silver Prepaid MasterCard
Issued by MetaBank, Silver Prepaid Master Card with direct deposit serves as a great way to pay. Easy to use, safer than cash, the card can be used everywhere debit MasterCard is accepted and comes with a variety of free features.
• Free Signature transactions
• Free activation (Allow 30 days for processing the rebate to your Silver card.)
• Free online statements
• Free email and text message alerts (Your card account balance can be text messaged to your cell phone or emailed to you each day for free.)
• Free automated voice response
• Free direct deposit
• Free PayPal transfers (You can transfer money from a PayPal account directly to your Silver card for free.)
Learn more about Silver Prepaid Card at the Silver Prepaid website.
Green Dot Prepaid Card
The card is a Debit MasterCard or Visa debit card personalized with your name. That is to say, you can use it everywhere MasterCard or Visa debit cards are accepted – shop online, pay bills and get cash at ATMs.
Though it carries a lot of fees, many of them are avoidable. For instance, a monthly fee up to $5.95 can be waived in any month that you have at least 30 purchases post to your card or load 1,000. ATM withdrawals are free if you withdraw money at thousands of participating MoneyPass ATMs nationwide. Otherwise, you will be charged $2.25 per withdrawal.
Extra features:
• No overdraft fees, no penalty charges and no minimum balance
• Your money is protected if your personalized card is lost or stolen
• No credit check & no bank account required
• Add money to your card at the store or with payroll direct deposit
You can find more info at Green Dot website.
Basics of Prepaid Credit Cards
You might regret that you were so careless about your credit – overdraft, late or missed payment, multitude of debts… so many things will get your credit score down and leave you financially embarrassed. Then a kind of easy-to-apply cards spring up and offer the same convenience of credit cards without various headaches that may get involved. We call this card “reloaded prepaid credit card.”
These plastic credit cards can be used in the same way as credit cards, to make payments at a diversity of locations and withdraw real cash from ATMs. The major difference between the two types is that prepaid credit cards are pre-funded and can be reloaded if the money in the account runs out. For people with bad credit, instant prepaid credit card is preferred for its quick approval, as these cards have nothing to do with your credit.
Today, an increasing number of people choose prepaid credit cards with no fees as a smart alternative to regular credit cards. These cards do not charge fees for a variety of services like application and account maintenance, and sometimes the transactions and ATM withdrawals may be also free.
Some people do not feel comfortable to offer personal information in order to obtain a credit card – actually, they feel offended! Then, here comes anonymous prepaid credit card which ensures you the higher level of privacy. Cards in this kind do not gather cardholder’s personal information and your payment history can not be tracked.
