Should you transfer to prepaid debit cards? To answer this question, let’s talk about the options that debit cards provide along with the advantages you can enjoy upon using them. But first, let’s briefly discuss what prepaid debit cards are and how they differ from credit cards.

A prepaid debit card looks like a regular credit card. You can carry it with you when shopping at the mall or at groceries and use them as payment. Instead of bringing cash, just bring your prepaid debit card with you and enjoy the convenience. Prepaid debit cards can also be used in restaurants, gas stations, and even at online merchants.

Since they are prepaid, the debit card holder must place enough funds in his/her account before using the card. The purchases will instantly be deducted from the card holder’s debit account so there’s no need to worry about due dates or repayments.

Prepaid Debit Cards vs Checking Accounts

Instead of opening a checking account, having a prepaid debit card offers the same functions that a checking account provides but with less limits. For instance, if you have bad credit, a prepaid debit card is a lot easier to avail than opening a checking account. There’s no need to carry around checks or worry about getting your blank checks stolen. In case your prepaid debit card is stolen, you can simply call your bank right away so that your account can be put on alert.

Using Prepaid Debit Cards for Internet Shopping

Another advantage of prepaid debit cards is they can be used in shopping online even if you don’t have a credit card or a bank savings account. For many shoppers who prefer to shop from the internet, having a prepaid debit card is a great tool because the risk of credit card fraud and identity theft are avoided.

Prepaid Debit Cards vs. Pay Checks

Prepaid debit cards are now used in government offices as well as in private firms as tools for distributing monthly salaries to employees. Prepaid debit cards are easier to use than issuing paychecks. If you have a home based business or a small business, you can use prepaid debit cards in sending your payments to your employees regardless of their location. Now that freelancing is gaining wide popularity among business owners, prepaid debit cards are also enjoying the recognition.

Prepaid Debit Cards vs Credit Cards

Prepaid debit cards do not allow card holders to carry over balances they incur from month to month. With a prepaid debit card, the card holder can only purchase the maximum amount that is available in his/her debit account. Neglecting payment dues and incurring interest rates and penalty fees are also avoided.

This limitation can actually be an advantage especially for those with uncontrolled spending habits. Without the option to carry over balances, a debit card holder is encouraged to use the debit card only for reasonable purchases. If you’ve had trouble with bad credit before, switching to a prepaid card can be a good solution.

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!