This article will tackle the benefits of debit cards and why owning them is worth the choice. We’ll also discuss the difference of prepaid debit cards and how they can be useful for people with bad credit.
The Beginning of Prepaid Debit Cards
Prepaid debit cards were introduced in the market beginning in the early 1990s particularly to cater people with bad credit. Since poor credit will not qualify an individual for a standard credit card, he can opt to have a prepaid debit card instead.
It is called prepaid because it requires the card holder to submit a certain amount of deposit in his account. Usually, the card holder’s spending limit will depend on how much money he has on the account. Therefore, a prepaid debit card can also be considered as a secured form of credit card. Nevertheless, unlike a secured credit card, a prepaid debit card holder is not given a credit line.
Now let’s consider one by one the advantages of prepaid debit cards:
It can help put your spending in control. With a regular credit card, it may be too easy to charge purchases or expenses that are more than what you can afford to pay with your income. Many credit card holders tend to splurge without considering the consequences. In turn, unpaid credit card bills can become a start of more serious debt problems. With a prepaid credit card, you’re using the money you already placed it in your account. There’s no need to worry about repayments.
Prepaid debit cards are widely accepted form of payment. Prepaid debit cards are recognized and accepted by almost all merchants worldwide. These cards can be used both for online shopping or when purchasing from regular stores. You don’t have to put in a large amount of deposit into your debit card if you’re worried about online fraud. You can just deposit an estimated amount that you’ll be using for your planned online purchase.
Prepaid debit cards are easy to avail. Unlike credit cards that require good credit, prepaid debit card issuers do not make a check the applicant’s credit score. Debit card issuers have more lenient qualifications and are often readily available for anyone. Generally, most prepaid debit card companies only require that the applicant be of legal age.
Prepaid debit cards are more cost-effective than bank checks. Prepaid debit cards are ideal to use for payment instead of traditional bank checks. By using your debit card to make payments, you save from additional bank charges.
Prepaid debit cards are cheaper to use when sending funds. Money transfer agencies often charge a lot on delivery charges. If you frequently send money to your friends or loved ones from a far, debit cards will be a very useful tool for you.
Debit cards can be used to pay our freelancers. Are you a homebased business owner? Do you have freelance agents working for you? Then debit cards are great tools to use for sending payments to your freelancers anywhere in the world.
About the Author
Tara Tiemann is a credit analyst for Go-prepaid.com which has been a resource site for people who want to live debt free. If you are on a budget using prepaid debit cards, pre paid credit cards and prepaid cell phone service can save you big money!