Understandably, there will always be misconceptions about new tools and technologies and reloadable prepaid cards are no exception. While credit and debit cards have been around since the 70s, prepaid cards are considered the most recent FinTech innovation.
Since they are considered relatively new, it’s not really surprising that people are still unfamiliar with reloadable prepaid cards and don’t know the truth behind some of the most prevalent reloadable prepaid card myths.
In this article, you’ll learn all there is to know about prepaid cards and the truths behind some of the most common reloadable prepaid card misconceptions.
Myth Number 01:
You can’t obtain a reloadable prepaid card if you have bad credit.
There’s no truth to this. When you use a prepaid card, you won’t be able to borrow money from the bank. Instead, purchase transactions and ATM withdrawals will be deducted from the money available on your card.
That being said, prepaid card issuers won’t take into account the credit standing of those who would like to obtain a prepaid card. Additionally, when you get a prepaid card, you are spared from submitting financial documents and the annoying long wait just to get your application approved.
Myth Number 02:
Prepaid cards and gift cards are one and the same.
While many people often mistake one from the other, prepaid cards are different from gift cards. For starters, prepaid cards are typically sold at grocery stores and can be loaded only once. In addition, gift cards can also be used only once.
This means you’ll have to purchase another gift card once you’ve depleted the balance available on your card. On the other hand, reloadable prepaid cards have a way higher limit and can be used for online transactions as well as ATM withdrawals.
Myth Number 03:
Only those with no access to bank accounts can use prepaid cards.
Prepaid cards are often used by freelance specialists, parents, smart budgeters, travellers, and business owners. If anything, it’s an awesome financial tool everyone can use, not just those individuals who don’t have access to banks.
For those who have access to banks, reloadable prepaid cards can also serve as an easy-to-get additional account. The charges and fees of reloadable prepaid cards are also often very minimal while its functionality and features are topnotch.
Myth Number 04:
Reloadable prepaid cards are risky to use and prone to security breaches.
Nothing can be farther from the truth. If anything, reloadable prepaid cards are considered very secure. In fact, some prepaid cards even come with two-factor authentication just like some debit cards.
Each time the card is used for ATM withdrawals, a PIN will be required so transactions are secured and protected.
Myth Number 05:
Just like credit cards, prepaid cards can also be overdrawn.
If your bank account comes with an overdraft feature, it’s easy for you to spend beyond the balance available. Fortunately, with a prepaid card, your spending is limited by the balance available on the card.
This makes prepaid cards ideal for parents who want to teach their children the value of money and not spending beyond what they can afford to.
Myth Number 06:
You can’t use your reloadable prepaid card for online shopping.
Online shopping is one of the enticing activities you can do using your prepaid card. If truth be told, many people consider using a prepaid card ideal for online purchases.
Why? For starters, since it’s not linked to your bank or savings account, you won’t be compromising your account or any personal information.
So why risk getting your bank accounts compromised when you have a preloaded, safe, and independent prepaid card?