Understanding Prepaid Debit Cards
By Jennie L.
Due to great losses, credit card companies had to look for different means of securing their debts starting in the 1990's. It is then that they came out the secured credit card and not long after that came the prepaid debit card. Prepaid debit cards are issued by most every credit card company such as MasterCard, Visa and American Express.
With a debit credit card, the funds are added to a prepaid card at a retail location or through using an online bank. The prepaid debit card is similar to how prepaid phone cards work. In short, a prepaid debit card is cash that has been applied to the card so the funds can later be accessed electronically. The cards are set at a limit that is the same as the deposited amount. Every time you use the card, the amount is deducted from the total on the card until the balance reaches zero.
Prepaid debt cards host a wide variety of benefits. These cards are safer for consumers to carry around than cash and they can be used in all countries around the world in most instances.
Other benefits are not worrying about a monthly credit card bill. Any person over the age of 18 can carry a prepaid debit card, no matter what their credit history is. Even those with bad credit can utilize the benefits of prepaid debit cards because the funds are loaded on the card before it is issued.
You can easily reload your prepaid debt card by phone or online as long as you have the funds. This can be helpful when going on vacation, business travel or when you have a teenager away at college and you don't want to just send cash. In fact, many companies are now using prepaid debt cards to replace expense accounts and company credit cards.
As with other credit cards, the fees can be quite expensive. There are fees attached when first getting the card, when you re-load the card, if you go over the limit, cashing out and even canceling the card. Compare card fees and try to go with a card that will cost you less money in the long run but without sacrificing benefits.
The advantages of prepaid debit cards outweigh the disadvantages in most case. Especially for those people who can't meet the required criteria for a regular credit card due to poor credit scores. However, keep in mind, prepaid debit cards still need to be used responsibly just like with any other card. They are easy to load time after time until your bank funds are depleted. It is essential to keep records of your purchases to prevent any confusion in your account!
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