Without doubt, prepaid cards have a lot of surface similarities with other plastic cards like debit and credit cards. No wonder they can be easily mistaken as prepaid cards since they look almost identical. Prepaid cards also have some of the fantastic features shared by other plastic cards.
That being said, it does not come as a surprise that prepaid cards have earned the trust of many users in just a short amount of time. Not convinced? Consider this: according to a research done by the Mercator Advisory Group, a staggering $40.85 billion was loaded onto prepaid cards in 2010 alone.
There are various ways to load money onto the card depending on what you want. Some of the most common options preferred by most cardholders include reload cards, bank transfers, direct deposits, and loading through secure online portals. Also, most cards available are associated with established card networks and institutions.
If you own and use a prepaid card but still don’t know its ins and outs or if you are considering getting one, keep the following basics in mind:
Many have the common misconception that prepaid cards and gift cards are one and the same. However, nothing can be farther from the truth. While they do share a few similarities, they also have very distinct differences. For starters, prepaid cards are not linked to savings or checking accounts.
Unlike gift cards, prepaid cards are also designed for long-term and repeat usage. That said, you will only be asked to provide just basic information when obtaining a prepaid card. Often, you will have to provide your name, phone number, address, and birthdate. In some cases, your social security number might be required.
While not true for all, some prepaid card providers might charge for transactions done using the card including activation and balance inquiry. However, this is not the case for all since prepaid card providers have different rates for transactions done using their prepaid cards.
Some providers on the other hand might only charge for specific transactions using the card including reloading and ATM withdrawals. Ideally, you need to check with the provider for the specific amount they would charge for each transaction done using the card.
To entice people to use their prepaid cards, some providers offer perks, benefits, and other freebies. Some of the most enticing freebies and perks are offered by credit cards. However, some prepaid card providers are giving them a run for their money. For instance, some prepaid card providers offer protection for stolen or lost items that are purchased using the prepaid card.
However, reporting the transaction is typically required within 90 days from the date of purchase for the users to enjoy the perk. Those who are avid travelers also get to enjoy global assistance in the form of medical and legal aid that they can enjoy when they are outside the country.
While most prepaid cards share the same function, they can differ when it comes to the type and kind of customer service they provide. For instance, while some prepaid card providers give their cardholders the option to take to an agent or customer service representative, others only provide voicemails or email contacts.