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Prepaid Debit Cards Explained

best prepaid debit cards

Not everyone may be aware of it but the best prepaid debit cards work pretty much like a combination of a checking account and a credit card. In addition, just like the typical debit and credit cards, the best prepaid debit cards are also associated with established financial and credit institutions like MasterCard and Visa.

For the uninitiated, money has to be loaded onto the prepaid card first before the user can use it for any transactions. The awesome thing is prepaid debit cards are often accepted in places where credit cards are honoured.

However, while the usage aspect of a prepaid card is similar to that of a credit card, it’s financial aspect on the other hand is more similar to that of a checking account.

When cardholders use their prepaid card for transactions, the transaction amount is directly deducted from the available balance on the card. In other words, prepaid card user transactions are limited to the balance that’s available on the card.

Prepaid Debit Card Fundamentals

Nowadays, many people consider prepaid debit cards as a new and ingenious financial tool that will allow cardholders to use the money that’s been preloaded on the card. The card can be used at merchants and at other places where known financial networks like Visa or MasterCard are honoured.

Prepaid debit cardholders need to always be mindful they don’t use the card for transactions that cost more than the amount that’s available on the card. Otherwise, the transaction will not push through and the card will be declined.

Fortunately, in the event that the balance on the card has been depleted, cardholders can load money on the card at anytime. Otherwise, they won’t be able to use the card until money has been loaded on the card again.

best prepaid debit cards

Prepaid cards, unlike credit cards, don’t have credit capabilities. What that means is the spending of the cardholder will always depend on the balance that’s on the card. The good news is that cardholders won’t have to worry about spending beyond their means or not sticking to any budget they have set.

In addition, cardholders are also spared from paying those costly transaction fees, interests, and other unwanted charges.

Amazing Benefits of Prepaid Cards

Prepaid cards are deemed ideal for those individuals who would like to curb overspending and would like to manage their money accordingly. Fortunately, prepaid cards are very easy to obtain.

For starters, those who would like to have one are not required to present any financial records or undergo a tiring and time-consuming application process. Even more awesome is prepaid cardholders don’t need to have a favourable credit history to get access to one.

Also, apart from sparing user from those exorbitant interest, fees, and other charges, prepaid card users are also free from the worry of accumulating large debts. In addition, prepaid cardholders have a helpful ally in their quest to stick to their intended budget and not spend beyond their means.

Taking into account all the amazing benefits prepaid card offers, it’s easy to see why many consider it one of the best financial innovations and tools to have ever hit the market!


Alekhya is an international development specialist and author of several publications on socio economic development. Alekhya is a regular contributor to online article sites on the topics of on line education, underserved peoples, scholarship and educational excellence.

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