Prepaid Cards: How Safe are They?

Considering getting a prepaid card? You’re not alone! In fact, in 2015 alone, more than half of the American population got themselves a prepaid card. This is a huge jump compared to just 19 percent in 2008, according to Synergistics Research Group.

To date, there are more than a dozen different types of prepaid cards available in the market. Many of these types of cards are designed to cater to a specific need. For instance, international prepaid cards can be the consummate option for those who travel overseas frequently.

For many of these avid travellers, international prepaid cards can be the ideal alternative to bringing credit or debit cards as it is less risky (read: any of the accounts linked to their accounts won’t be compromised in the event of card loss or theft) but it offers almost the same exciting benefits.

Get to Know Your Prepaid Cards

While the popularity of prepaid cards is no longer up for debate, it is sad to note that not everyone is already fully aware of all the amazing things they have to offer. If truth be told, many are not even aware of what the prepaid card basics are. Below are some of the common questions cardholders have about their prepaid cards and the answers to them:

How safe are prepaid cards?

Since you’ll be using a PIN when you withdraw money using your prepaid card, they are considered very safe. In fact, they are deemed way safer than carrying cash. Also, when your prepaid card gets lost or stolen, you have the option to report the matter right away so you can avoid any financial loss. Of course, losing cash is a totally different story as it is way harder to get them back when you lost them.

What is my liability if my prepaid card gets lost or stolen?

In most cases, the liability will depend on the issuer’s policies pertaining to lost or stolen cards. Others will depend on how quickly the card loss or theft has been reported. If you want to play it safe, consider it best to contact your card’s customer service as soon as you notice or find out your card is missing.

Can I use my prepaid card to pay for online purchases?

Most definitely! In fact, prepaid cards are considered one of the safest ways to pay for purchases online. While you are limited by the balance that’s available on your card, it is reassuring to know that you still get to enjoy the same level of comfort and inconvenience those who use credit or debit cards enjoy in terms of paying for products or services online.

What needs to be done when the balance on my card is not enough to cover for my purchase?

The answer to this is very simple—just load money onto your card. While not everyone may be aware of it, transactions you can do (regardless if it’s purchase or withdrawal) using your prepaid card will depend on the balance that’s available on your card. That means if the balance is not enough to cover for the purchase or withdrawal, the transactions will be declined.

This kind of setup is considered very beneficial by many especially those people who are trying to curb overspending or are learning how to manage their money accordingly. When the balance available on the card is no longer sufficient or has been completely depleted, you won’t be able to use the card until you load money onto it again.

The great news is loading money on the card is both quick and straightforward. Once money has been successfully loaded on the card, you can immediately use it for purchase transactions as well as ATM withdrawals.