For prepaid debit cards, load the card with money when you get it and then use it for shopping. For regular debit cards, the funds for your payments are taken directly from your payment account while you pay. All the best prepaid debit cards that have made our list have different things to offer. Some are specially designed to encourage positive credit cards money management in children, and others offer money back rewards and additional features such as direct deposit, online invoice payment and fraud protection. With prepaid cards you spend money previously loaded on it; they are not connected to payment or savings accounts. They work like debit cards, but you don’t need a bank account to get one.
Instead, it loads the amount you want on the card, which becomes your limit. You can use a prepaid debit card online and in most retailers that accept a regular bank card. In general, however, you cannot rent a car with a prepaid debit card.
The difference between prepaid debit cards and payment accounts is starting to blur, as many have similar features and services. Not long ago, your options for paying for goods or services were cash, checks or credit cards. Prepaid cards are among the fastest growing consumer financial products in the US. Consumers have nearly $ 65 billion in prepaid cards “rechargeable for general use” in 2012; it is expected to nearly double to $ 112 billion by 2018.
Likewise, you can pay bills and make other regular payments with it. Many organizations offer incentives for customers who pay direct debit, while others only accept payments that way. With a prepaid card, you can configure that kind of regular payments so you don’t miss them, which can affect your overall creditworthiness. When choosing a prepaid debit card, you want to compare several before deciding on the best option.
These are some of the biggest benefits you will find when using prepaid debit cards instead of other more traditional payment methods. With so many other financing options on the market, you probably wonder why someone would use a prepaid debit card in the first place. For example, if they used a credit card, they would have access to a credit line that they could pay over time and possibly earn rewards. With a traditional bank card, on the other hand, the money they spend would be deducted directly from their bank accounts. Chime is not a prepaid debit or traditional bank account, but a free “spending account” on the Visa payment network.
Unlike a normal bank card, you don’t need a bank account to have a prepaid debit card. For that reason, these cards are widely used by non-bank-related adults who are unable or unwilling to get a traditional bank account, but sometimes need an alternative to cash payment. With ubiquitous cash transactions, it is difficult to avoid having some sort of card with you today.
The Visa Netspend prepaid card can be used anywhere Visa debit cards are accepted. Netspend Prepaid Mastercard can be used wherever the Debit Mastercard is accepted. Use of the card account depends on the availability of money and identity verification.
Cards can be a better option for non-bank-related consumers, as they can avoid check-in rates, access their money faster, shop online and shop where MasterCard and Visa are accepted. Even if these consumers have been excluded from the banking system in the past due to bank account mismanagement, they are still eligible for a pay card. Please note that while prepaid cards are an alternative to credit and debit, they will not help you generate credit. To establish a credit history, you must use a credit card regularly and pay your bills in full on time and every month.