Traditional bank accounts are, by and large, the most accepted banking choice resonating with punters the world over. However, there is an alternative instrument that is quickly gaining acceptance – the prepaid card.
Prepaid cards function in fundamentally the same ways as a conventional debit card would, but with a couple of exceptions. The fee structures on prepaid cards are lower than their debit equivalents, especially in terms of maintenance and overdraft charges. Prepaid cards may prove to be more suitable for users who wish to plot out their financial road map in advance. This is achieved through offering a clear, defined and expected fee table with much of the allowances found with a regular bank account. Those include:debit or credit card offers, brick and mortar retail transactions, direct deposit, ATM withdrawal and even online access.
All the Benefits of Traditional Bank Accounts
You are able to have all or a percentage of your pay-cheque put directly into your prepaid card account. This allows you to avoid the hassle of bank lines or cheque cashing machines. At the moment that money is placed into the cards accounts, they will operate just like predictable credit cards would, giving you the ability to complete purchases online and in-store. For even more convenience, associate them with virtual wallets such as Google Wallet or PayPal.
Giving the Under banked More Options
Individuals living in suburban and urban centers might accept them as the norm and be dulled by its convenience, but traditional brick-and-mortar banks are not universally available around the globe. It is essential to consider that there remains an unbaked population who is fiscally aware due to their persistent reminder of their financial status, but these people still require access to financial instruments to assist them in bettering their money managing skills. It is in these areas and the under banked population where prepaid cards are most practical.
Mitigating Risk when Shopping
One of the best advantages of prepaid cards lies in the fact that the card only has the amount of money you put on it. Never will you have to fear a cyber-thief accessing and damaging your credit. In the unlucky event where your card is stolen or lost, most issuers are incredibly responsive and understanding in terms of getting your account back to normal.
Lower Entry Barrier
In nearly every account you open, your credit score plays a crucial role. Whether it be for a credit card, bank account, loan and so on– all, except for prepaid cards.
Prepaid card issuers will never check your credit score as part of the application process. This makes the route of a prepaid card a great solution for people who may have a bad credit due to poor financial planning, previous bankruptcy or other financial hardship. This fact remains the primary reason why a number of the unbanked and under banked use prepaid cards. It is simply because prepaid cards are the perfect answer for all of their financial worries, questions and needs.