Prepaid Cards: Facts and Fiction

Posted By : admin

March 30, 2020

While credit and debit cards have been used since the 70s, the best prepaid cards are still considered a fresh and ingenious FinTech innovation. However, even if deemed relatively new, the best prepaid cards have been warmly accepted and are considered a favourite by many.

Since it has only been a few years since prepaid cards have been introduced, it’s not really surprising many misconceptions and half-truths have been floating around regarding this highly awesome and innovative financial tool.

If you are one of the many people who would like to add a prepaid card to your arsenal of amazing financial tools, it would be best to know the myths and misconceptions surrounding prepaid cards and the facts and truths behind them:

Fiction: You can’t obtain a prepaid card if you have bad credit

Unlike credit cards, prepaid cards don’t come with credit capabilities. What is meant by that exactly? Simply put, when you perform purchase transactions using your card, you will not be using the issuer’s money. Since there is no credit involved, issuers of prepaid cards are not as particular about who they issue prepaid cards to.

Also, even if your credit standing is not exactly impressive or favourable, it won’t hinder you from obtaining a prepaid card and enjoying all the amazing benefits it offers. Apart from the opportunity to enjoy all the wonderful benefits prepaid cards offer, you are also spared from the inconvenience and hassle of providing personal information or submitting financial documents.

Fiction: Prepaid cards work just like gift cards

This is definitely false. For starters, gift cards are typically sold at grocery stores and are designed only for one-time use. On the contrary, prepaid cards are designed for repeated use and can be used as long as there is money available on the card.

Once the balance on the card has been depleted, prepaid cardholders have the option to load money onto the card so it can be used again. When it comes to gift cards, however, they are deemed useless once the balance available has been consumed and depleted. In essence, unlike gift cards, prepaid cards are not disposable.

Fiction: Prepaid cards are only honoured in selected places

Again, there is no truth to this. In majority of the cases, prepaid cards associated with huge and seasoned credit and financial institutions are often accepted where those brands are honoured. For the record, that’s a staggering 40 millions places worldwide! Truly, that’s functionality, ease, and convenience you can’t afford to miss out on!