Prepaid Card Services
A prepaid card is an alternative banking product that only lets you spend the money you load onto the card. Like debit cards, prepaid cards work at any merchant that accepts its payment network, such as Visa or Mastercard. They’re safer and more convenient than using cash. They’re also known as stored-value cards, pay-as-you-go cards or, more formally, general-purpose reloadable prepaid cards. Prepaid cards are essentially credit cards – with a MasterCard or Visa logo – but their balance is predetermined by the cardholder via prepayment. The cards can be used everywhere traditional credit cards are accepted: ATM’s, shops, restaurants, online, and over the phone. If you try spending more than you have, most prepaid cards simply decline the transaction. They can be useful for people on a fixed income or teenagers who get allowances There are a number of consumer benefits to prepaid cards, including:
Availability
You can often find prepaid cards at checkout lanes when you’re at the supermarket, typically next to gift cards. Similar to a gift card, you add value to the prepaid card before you can use it, which is essentially like prepaying for future purchases. Prepaid cards are available to all consumers over 18 regardless of background, giving people the opportunity to carry a Visa or MasterCard. Since these cards are prepaid (meaning the value is determined by how much credit is loaded onto them, rather than a line of credit), there is no risk to the holder of running past their limit and being charged exorbitant fees, and no risk to the issuer that holders will default on payments.
Convenience
Like credit cards, prepaid cards are accepted around the world and online – through any merchant who displays the Visa or MasterCard logo. This enables consumers to shop and pay quickly and easily, through the simple swipe of a card, or to shop online from the comfort of home (or mobile device) at any time of the day. For travelers with a card, gone are the days of seeking out a currency exchange vendor and protecting a lot of cash in a travel pouch.
Security
Prepaid cards are like cash, with an added layer of security. Once the balance has been set by applying cash to the card, the holder is protected from risks such as fraudulent purchases, loss, and theft. If fraudulent charges appear on the card, the holder can report it to their issuing company to investigate and reimburse the funds. Card holders can rest comfortably knowing their cash is protected with a prepaid card.
Ease-of-Use
By now, most people have a good understanding of how to use a credit card, so adopting a prepaid card is simple as they’re used in the exact same way. With most issuers, adding funds to the balance can be done through a transfer of funds from a bank account to the card. The card holder can then safely and easily make purchases anywhere credit cards are accepted: websites, ATM’s, hotels, restaurants, shops, and more.
Budget-Friendly
Tracking purchases against a budget can be challenging, especially between cards, accounts, and cash. Prepaid cards make budgeting easier and smoother. Because there is no credit line – the balance is always determined by the prepayment made to the card for spending – holders don’t need to worry about going into debt, or incurring fees from running past their limit.