Posted By : admin
May 12, 2020
While unknown to many, the best prepaid cards work like a combination of a credit card and a checking account. Just like most credit cards, they can also be issued by banks and branded by some of the top and established financial institutions. While the best prepaid cards share some features with credit cards, they have one major distinction—they don’t have credit capabilities.
Prepaid cards also share a common characteristic with gift cards in the sense that the card has to be loaded with money first before it can be used for any transactions. Fortunately, prepaid cards are also often honoured in most establishments where credit cards are accepted.
While the functionality of prepaid cards are more identical to credit cards, its financial side is more similar to that of a checking account. This means that any purchases or withdrawals done will be deducted from the total balance that’s available on the card. With a set up like this, it is also expected that spending will automatically stop as soon as the balance on the card has been depleted.
For many, prepaid cards are considered a wonderful alternative for various transactions that require credit card usage. They are also considered especially helpful for those who don’t have access to banking services, have poor credit scores, or those who have very minimal knowledge in terms of how banks work.
In addition, prepaid cards are also seen as ideal alternatives for gift-giving as they provide beneficial features like protection in the event of card loss or theft. Nowadays, many people opt to give prepaid cards as opposed to cash for those enticing reasons mentioned earlier.
Since cash cannot be spent online, it also follows that it cannot be used to purchase items online. Fortunately, money that’s loaded in prepaid cards can be used for purchases as well as other online transactions. Thanks to the countless benefits they offer, prepaid cards have evolved to be one of the fastest growing niches in today’s modern financial sector.
It is reassuring to know that picking the best prepaid card is not really rocket science. When choosing the best prepaid card for your needs, keep the following in mind:
Take time to analyse and look into your spending habits before deciding on a prepaid card. As a general rule of thumb, opt for a card that will charge you in areas where you are more likely to be charged. For example, if you are the type who uses your prepaid card often, look for one that will waive fees each time you exceed the monthly transaction limit.
Another helpful tip would be to look for a prepaid card that has a structure that’s easy for you to understand. Keep in mind that some prepaid cards use a flat-fee model while others charge for most of the transactions done. Look into your monthly card activities and assess if flat-fee cards would be a more ideal and practical option for you.
Lastly, don’t forget to conduct a thorough comparison of the prospective cards you are considering before making a decision. Comparing features will require a little time but it will save you a huge amount of money in the long run so it’s all worth it.