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Prepaid Debit Cards
During the 1990's credit card companies had to look at a
different means of securing their debts because of great
losses. At that time they came out with the secured credit card
and following close behind came the prepaid debit card. Prepaid
debit cards are issued by most credit card companies, such as
Visa, American Express and Mastercard. In this instance, funds
are added to a prepaid debit card at a retail location or
through an online bank. The prepaid card works very much like a
prepaid phone card. Basically, a prepaid debit card is cash
that has been applied to a plastic card so that the funds can
be accessed electronically. These cards are set at a limit that
is identical to the amount deposited. Each time you use the
card, the amount on the prepaid debit card decreases until it
reaches zero funds.
Prepaid cards have a wide range of benefits. They are much
safer for consumers to carry than cash and they can be used in
all countries in the world, depending on the company you chose
to obtain a prepaid debit card from. Mastercard, American
Express, Visa all offer these cards, as do some banks.
Other benefits include not having to worry about a monthly
credit card bill or debt. Any person who is over the age of
eighteen can carry a prepaid debit card, regardless of their
credit history. Even those with extremely poor credit can
access a prepaid debit card because they have to have the funds
before the card is issued.
Prepaid debit cards can easily be re-loaded by phone or online
as long as there are funds available. This allows easy access
to electronic funds when on vacation and during business
travel. Many companies are now using prepaid debit cards in
place of expense accounts or company credit cards.
As with any other type of card the fees can be astronomical.
There are fees attached for getting the card, re-loading it,
for going over the limit, cashing out the card and canceling it
if you should decide to do so. The cards with the lesser fees
are the best to use, so check around to see which companies are
offering the best deals. The average cost for re-loading a
prepaid debit card is around $5.00, so be sure to add enough
funds to cut down on repeat re-loading.
Funds from prepaid debit cards can only be accessed with your
PIN number. Be sure to change it often and never tell anyone
what it is. It is best if you have your bank or the company
where you obtain the card to put a daily maximum on it in case
your card is ever stolen or in the rare instance that someone
is able to obtain your PIN number.
For the most part the advantages of prepaid debit cards far
outweigh the disadvantages, especially for those who cannot
meet the criteria to obtain credit cards because of a poor
credit history. But remember, prepaid debit cards have to be
used responsibly, just as any other card. They are easily to
load time after time until your bank funds are depleted. Be
sure to keep records of your purchases to prevent this type of
catastrophe.
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