Reloadable prepaid cards are considered a relatively easy way to pay for purchases without the use of cash, credit cards, or savings accounts. Reloadable prepaid cards are also seen as a much safer option as you would need to load money on the card first before you can use it.
This means people won’t have direct access to your savings or bank account. However, while reloadable prepaid cards can be wonderful alternatives for those who want to stop overspending and manage their money properly, they are not ideal for those who are looking to build up their credit scores.
In essence, a reloadable prepaid card is a secure card that has pre-deposited cash. When used for purchase transactions, they are checked for approval against existing funds. In other words, transactions won’t push through if the balance on your card is not sufficient to cover your purchase or withdrawal.
The Lowdown on Prepaid Cards
Reloadable prepaid cards can be used for purchase transactions (whether merchant or online). It can also be used for ATM withdrawals. As mentioned earlier, you can also withdraw money using your prepaid card. Prepaid cards are also sometimes referred to as stored value cards.
You can obtain prepaid cards at various stores. Reloadable prepaid cards look very similar to plastic cards and they are usually associated with financial institutions that are already established. There are also various ways you can load money onto your reloadable prepaid cards.
For instance, you can load money through mobile apps, secure online portals, or by transferring money from your savings account. Also, while reloadable prepaid cards also look very similar to other plastic cards like credit and debit cards, you will be using your own money rather than “borrowing” from the banks or the provider.
Reloadable prepaid cards also work like a gift card as it allows you to spend whatever money is loaded on your card. However, once all the balance has been depleted, you are required to load money onto the card before you can use the card again for purchase transactions or ATM withdrawals.
Like debit and credit cards, reloadable prepaid cards also have corresponding fees depending on the transactions you will do. For instance, you can be charged for your monthly usage, reload, activation or ATM withdrawals. It is also likely that you will pay for transactions you will do overseas.
Loading money on your card will also depend on what you deem convenient. Fortunately, you have the option to load money onto your card using means you prefer. You can also reload money on your card weekly, monthly, yearly, or even daily, depending on what you prefer.
If you want to spare yourself from all the trouble of filling out tons of paperwork and don’t want to subject yourself to background or credit checks, using a reloadable prepaid card is your ultimate choice. With prepaid cards, you won’t have to worry about submitting confidential or financial information as they won’t be required to obtain one.
What’s even more enticing is reloadable prepaid cards can be a wonderful option if you want to curb overspending and use your money accordingly. Come to think of it, it is indeed easy to overspend when you use debit or credit cards. However, when you use reloadable prepaid cards, your spending will be limited by the balance available on the card.
This means as soon as the balance has been depleted, spending also stops automatically. Reloadable prepaid cards are also a practical option for those who want to manage their money accordingly. In fact, many parents use prepaid cards to teach their kids about proper money management.
