What do prominent personalities like Suze Orman, Magic Johnson, and the Kardashians share in common? If you guessed they have all marketed a prepaid debit card, then you are right!
Nowadays, celebrity-endorsed or not, more and more people are now using plastic cards like debit, credit, and prepaid debit cards to do withdrawal and purchases transactions.
However, with multiple options available at people’s disposal, it’s easy to confuse one card for the other. While most cards appear almost identical and share several surface similarities, they are actually very different in terms of features and usage.
Case in point: a prepaid debit card is different from a credit card in a lot of ways. While credit cards allow cardholders to borrow money for withdrawals and purchase transactions, money needs to be loaded in a prepaid debit card before it can be used.
Apart from offering unmatched convenience and ease, prepaid cards also come with enticing features and built-in benefits that make them the ultimate option among the many plastic cards available.
If you’re still not convinced, below are some of the sensible reasons to own a prepaid debit card:
They are amazing budgeting tools
If you are like a lot of people, it is possible that you find managing your money properly and curbing your spending challenging. Fortunately, getting your hands on a prepaid debit card can help you solve two of those concerns.
How? When the money loaded on the card has been used up, you won’t be able to use the card until such time that money is loaded onto the card again.
In other words, prepaid debit cards won’t let you borrow money from the bank unlike a credit card so you won’t spend beyond your means and beyond what you can actually afford to.
That being said, it’s not surprising many parents consider prepaid debit cards as the perfect option for parents who are looking to teach their children wise spending and proper money management.
They are easy to obtain
Unlike credit cards, prepaid cards are without doubt way easier to obtain. For starters, there is no need to provide financial documents or personal information just to get one. In addition, any information provided will not be stored in any database.
This is a very beneficial setup for those who are very particular about security as it dramatically lessens any possibility of any personal information getting compromised or stolen.
In majority of the cases, applying for a prepaid debit card will only require that you provide basic information. At the most, you’ll most likely will just be required to provide your name, security number, and contact number and you are good to go.
There are no overdraft fees
Have you at one point or another overdrawn your checking account and found yourself slapped with several fees that are through the roof? Some banks will also reorder the charges (from largest to smallest) and cardholders will often end up with a larger overdraft fee as a result.
With a prepaid debit card however, you are spared for the risk of overdrawing and paying costly and exuberant overdraft fees.