Prepaid cards are known for being a safer and more convenient alternative option to your traditional payment methods. Aside from offering consumers a substitute to using cash, prepaid cards function similarly to your traditional debit or credit cards, allowing cardholders to make purchases in-store, shop online, withdraw cash from ATM machines and can be used anywhere that accepts credit cards. Here are five reasons why you should apply for a prepaid card today:
- No Credit Check Required
If you have bad credit or no credit history at all, receiving approval for a credit card is nearly impossible. However, prepaid cards are another option, as the majority of prepaid cards do not require a credit check. These lower entry barriers make prepaid cards an appealing option for many, with almost any applicant being able to obtain one and, allowing them to use their card at the same places where a traditional Visa or MasterCard can be used.
- Prepaid Cards Support Budgeting
Prepaid cards work well as a budgeting tool, making it easier to follow their monthly or weekly budgets. For example, if you have a set shopping budget, you can simply load that particular amount of money onto the card, and that will be all that you can spend during your shopping trip. In addition, if you are financially supporting someone, you can use prepaid cards to send them money while ensuring that they do not overspend beyond their budget.
- No Overdraft Fees
One of the most annoying aspects of debit cards is the possibility of over-drafting and the subsequent charges it incurs. Overdraft fees aren’t a possibility with prepaid cards, as you are only ever able to spend the amount loaded on the card—no more. If the card holder doesn’t have sufficient funds loaded on the prepaid card, the purchase will simply be declined.
- Pay Recurring Bills with Prepaid Cards
A prepaid card that shows the Visa, MasterCard or American Express icon can be used just like a traditional credit card and is accepted at all the same places—including online and brick-and-mortar stores. Most prepaid cards can also be used to set up one-time and recurring bill payments for monthly or annual expenses.
Be sure that you’ve loaded sufficient funds onto your card for recurring payments; remember, over-drafting isn’t a possibility with prepaid cards, therefore if you have insufficient funds to pay for a repeated expense, such as phone bill, your merchant may cancel it.
5. No Credit Hazards
Transactions made with prepaid cards are not reported to credit bureaus, which means that your prepaid card purchases will not affect your credit score or credit history in any way. By offering more autonomy, privacy, and security than traditional payment cards, prepaid cards are the most practical solution for people living in today’s world.