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.