It is quite convenient to shop with prepaid cards. If you are yet to join the club, you are seriously lagging behind! There are more than a dozen types of prepaid cards on the market now, and plenty of variations that can make them a wonderful or terrible choice. One of the popular ones is my vanilla which can be used everywhere Visa debit cards or Debit Mastercard is accepted. Here are the things you need to know about prepaid cards.
They are more like debit than credit
Prepaid cards look like credit cards and spend like credit cards but there’s no credit behind them. They are technically debit cards– when you use them, you’re spending your own money, not the bank’s.
Perfect alternatives to bank
You can use your prepaid cards to pay for anything including booking a hotel room or renting a car. They even come with account and routing numbers, which means you can have your paycheck directly-deposited onto your card.
Look for features that suit your needs
Some prepaid cards let you pay bills online, even setting up automatic monthly payments. Some will issue payments via an electronic check issued by the card company or let you withdraw cash from an ATM using a special PIN. You can manage your account online or, often, via a mobile app. So, you do not need to worry about your account status because you can check it whenever you so desire.
The prepaid industry has expanded in recent years and with increased competition, consumers have far more options. These include prepaid cards with benefits aimed at specific lifestyles. Sometimes you can shop within the mobile app at discounted rates.
Can help you manage your money
Even for people with a regular bank account, a prepaid card can be an effective budgeting tool. Load your monthly grocery budget onto a prepaid card and use it strictly at the supermarket; when the money’s gone, your spending stops automatically.
While prepaid cards were developed by entrepreneurs as an alternative to banking, the funds in these accounts are almost always held by a bank. If you report the loss or theft of a registered card to the issuer, most will restore your original balance and issue a new card. In other words, you are protected. But that does not mean you should be careless with your card details.