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Prepaid Debit Cards

By: Stephen Bishop Jr.

Today, prepaid debit cards are becoming more popular and can be used by anyone. On first thought, many believe prepaid cards are only for certain people that cannot qualify for an unsecured credit card. This is not true. However, in the long run, students, teenagers, and those with poor credit can benefit more from the use of a prepaid debit card than, say someone with excellent credit.

So what exactly is a prepaid debit card? Well, have you ever used a prepaid phone card or calling card to make a phone call? It is similar to that, however it works as a card for everyday purchases at retail stores as well as online. Loading money is easy with a prepaid debit card and is typically done using direct deposit. However, loading options may vary depending on card issuer.

Some consider a prepaid debit card to be similar to a debit card issued from the bank or other financial institution. This is true. Fortunately for prepaid debit cardholders, there are no overdraft fees. Simply, the money that you load to fund your account is the maximum that can be spent on purchases. Prepaid cards allow the cardholder to load cash online, via mail, or at various locations nationwide. Some cards also allow the cardholder to fund the account over the phone as well.

Unlike your typical unsecured credit card, there are no credit checks and the majority of prepaid card issuers offer conditional guaranteed approvals. Several prepaid cards do not have minimum balance requirements. Some cards do require a set-up fee, so be sure to read the fee schedule prior to applying.

Believe it or not, many prepaid debit cards offer many of the same perks, rewards, and services that unsecured credit cards offer. Most prepaid cards are FDIC insured. The AccountNow MasterCard prepaid card even includes their Zero Liability program for unauthorized purchases. Many other prepaid cards offer rewards programs. For example, the Wired Plastic Prepaid Visa allows cardholders to earn one point for every dollar spent. The points can be redeemed for wireless airtime, music downloads, and LD calls. The Eufora Elite Credit Builder Prepaid MasterCard offers a cash rewards program for their cardholders, Auto Sweepstakes, and MasterCard Benefits.

Other services offered to prepaid cardholders include online account management, ATM access at many locations, free bill pay service, mobile and email alerts, and many others. Another great benefit with many prepaid cards is the option to have additional cards. With this option, friends and family can enjoy the same benefits as the primary cardholder.

While prepaid debit cards are not for everyone. It can be quite beneficial for individuals in certain situations. These situations include: people who are not able to obtain a bank account, people who have past credit problems, people looking for perks on their debit cards, or simply someone looking for an alternative to banking. Whatever you situation may be, you should always read the terms and conditions, along with the fee schedule, to make sure you know exactly what you’re applying for.