Earlier, when one thought of prepaid debit cards, the image that instantly came to mind was that of someone who did not qualify for a traditional bank account or was under-banked. But all that is old hat because prepaid cards have now made it into the big league and how!
Prepaid debit cards have gained prominence today primarily because they help people to cultivate financial responsibility. With liquid cash well on its way out, plastic money is slowly but surely becoming the most preferred way to make purchases. Moreover, the Internet has revolutionized the way we buy goods―most of it online.
Unlike credit and charge cards, payments using a debit card are immediately transferred from the cardholder’s designated bank account, instead of them paying the money back at a later date.
The statistics of the reach and potential of prepaid debit cards is staggering:
- Convenient card loading options
- Quite a few prepaid cards cost no more than a small amount to use―just a couple of dollars per month.
- Certain cards have added linked high yield savings accounts, that offer yields as high as 6 percent APY.
- Top offers have added checking account features, including mobile check deposits.
- Assured discount every month, even if you need more minutes/texts
- Some prepaid offers include perks generally associated with credit cards, such as travel and purchase protection.
Given a large number of benefits, scores of prepaid card users agree that this mode of financial transactions is a blessing. Contrary to the facilities extended by traditional checking accounts, today, prepaid users can conveniently make deposits with several retailers; and this includes basic convenience stores too. Moreover, unlike traditional banks, prepaid cards are a part of an extensive network of ATMs that enable users to withdraw cash without charges.
Even though prepaid cards are slowly becoming ubiquitous and all-pervasive, there are some important features that can help you decide if it’s the best around:
- Convenient card loading options
- Flexible ways to spend and pay bills
- Minimal monthly fees
- Free direct deposit
- Widely accepted
- Ability to send money to friends and family online or via mobile device
In July 2013, the Association of Government Accountants released a report on government use of prepaid cards, concluding that such programs offer a number of advantages to governments and those who receive payments on a prepaid card rather than by check. The prepaid card programs benefit payments largely for cost savings they offer and provide easier access to cash for recipients, as well as increased security. The report also advises that governments should consider replacing any remaining check-based payments with prepaid card programs in order to realize substantial savings for taxpayers, as well as benefits for payees.
When is it time for a Prepaid Debit Card?
- If you are finding it difficult to open a free or low-cost checking account. But remember that those who have issues such as non-payment of bank fees or overdrawing their account will get flagged in ChexSystems, a special credit system.
- If you are one of those people who are not a fan of some types of bank fees, such as overdraft or service fees.
- If you wish to keep your online purchases independent of your bank account or credit card.
- If you want to keep tabs on your kids’ spending habits; especially when you give them their allowance.
So go right on ahead and choose the prepaid credit card that suits you best. There are plenty of options to choose from, so take your time and analyze just how beneficial the choice will be for you in the long run.