Plastic cards of a different colour and flavour

Need for credit and debit cards.

10:40 02 May 2013

The new kid on the block; prepaid debit cards have the credit card experience without the quicksand issues of a credit card. With so many people carrying heavy debt loads, credit cards aren’t always an ideal option. While some retailers, including those online, it is the only payment method. The prepaid debit card looks and performs like a regular credit card. It is issued by recognized international financial institutions and credit agencies.

 

Coined as pay as you go credit cards, these cards set the credit limit to the amount deposited onto the card. For example, if the account has a balance of £230, then that is the amount available to charge on the card. If there is £750, then the credit limit is £750. Where the debit card can differ from regular credit cards is that if the funds aren’t there, the transaction will not be process hence eliminating overdraft fees and credit card debt. Notables for using the prepaid debit cards are:

 

• Reload cards for the prepaid debit cards are available in most retail outlets. Disposable reload cards can be predetermined amounts or open ended where amount is selected at time of purchase. Reusable cards also available eliminating the need to have a new one each time. This type is also open ended.

 

• Reloading fees (usually minimal regardless of amount of deposited) are assessed at the time of funds added to account. Funds on card don’t expire as long as there is some activity within the year.

 

• Debit card transactions can be easily monitored online.

 

• Used and accepted at most retailers and ATMs.

 

• Separate reloading (adding funds to the account) and service fees affect available balances. Other fees, including ATM and wire transfers maybe applied.

 

Prepaid debit cards are a great way for young people to start out or re-establish their credit as well as gaining better control of spending habits. A debit card, that works like a credit card.