A lot of people, especially those who are fond of shopping, prefer to use a prepaid credit card as their payment mode these days. The nice thing about these is that you have the option to get the single-use, reloadable, or the generic ones. Regardless if you purchase it for yourself or as a present, the convenience it gives to the users is endless.
What Are Prepaid Credit Cards?
These cards act like regular credit cards, like Visa or Mastercard, and are also redeemed in the same way as they do. Unlike in other gift cards, where it has a one-time use offer, these are reloadable through a direct deposit, bank transfer, or over-the-counter service. Their activation fees and reload may differ depending on the issuing bank.
The consumers can practically use it anywhere and everywhere–online or offline. As long as they accept major credit cards, then holders of prepaid credit cards have nothing to worry about since they can also use it in that same retailer.
These bank-issued prepaid cards don’t need any opening of bank accounts. Some individuals who don’t have savings accounts can benefit from this option. Unlike in store-issued gift cards, users of prepaid credit cards can quickly top up once there’s not enough balance. With store-issued gift cards, once there’s no longer credit, they will have to buy a new one.
Since it works like a credit card, this prepaid credit card can pay for recurring monthly bills for utilities. Simply enrol the card details to the scheduled payment, and it will immediately set a particular day or date for when the payment needs to be credited. It’s way faster than queueing and paying by cash.
When activating the card, it may cost the user a particular amount. But this is the only fee linked to that, unlike in regular credit cards exceeding from its available balance that may incur additional charges, depending on the excess amount. So far, with prepaid credit cards, the only clear fee is the one paid upfront. Besides, there’s no way someone can overspend in a prepaid credit card anyway.
The card is available to anybody, regardless of its credit status, employed or unemployed, as long as that person is old enough to perform transactions, then it’s good to go. The credit history of the user has got nothing to do with it. The most crucial part is to maintain the balance of the card if it is the reloadable type. If it’s the single-use, then it may need the owner to buy a new card, should they wish to use it somewhere else.
Giving this type of card to the young generation is one way of teaching them to be responsible spenders. College can be quite tempting because students are already living independently. Since the name already says it, prepaid, they can only spend as much as the value of the card. Parents can load up a certain amount and let them budget the available credit by themselves. Once they finish everything, adults can monitor when to reload the card again. Whether they use it for gas, shopping, dining, or anything they need, adults can easily track their spending.