It is a well known fact that prepaid cards are a better alternative to traditional credit cards when it comes to financial management, let’s discuss the other benefits.
Below is a list of why prepaid cards are worth consideration:
Efficient Budgeting Tool
If you have always had trouble with sticking to a budget, in other words keeping your spending under control, a prepaid card might just be what you’ve been looking for. As with most prepaid cards, once the cashed loaded is depleted, it is gone. There is no way for prepaid cardholders to spend more money than what they have pre-loaded in the card. Asides from this, prepaid cards are perfect for those who want to give someone else access to spending money without the possibility of exceeding what’s available. For example, if you want to teach your children financial discipline or maybe an “in case of emergency” prepaid card for your folks when they go travel in a foreign country.
No Overdraft Fees
For people who are sick and tired of accidentally over drafting their checking account by a small amount, only to find out that they are slammed with a big fee or even multiple fees, resorting to a prepaid card can be the ultimate solution for this problem as there is no danger of overdrawing the account.
Acquiring a prepaid card is much simpler than the procedures of applying for a credit card. Prepaid card applications usually require only the most basic information from applicants, for example (Passport, ID Card and proof of Address). No credit check will be required, simply put, credit ratings will be a thing of the past during a prepaid card application, as it is deemed unnecessary because prepaid cards are not connected to any line of credit or credit history. This special feature not only greatly enhances the privacy of the cardholder, but also greatly reduces the chance of a credit score deduction. The chance of your identity being compromised is nonexistent.
Prepaid cards can be recharged via a variety of different methods. Prepaid cardholders will not have to head to a store or bank once they have depleted the available balance on their prepaid card account. It is highly advisable that potential prepaid card applicants should check with their card providers before hand to understand the different loading options and methods available to them.
Despite being in the age of digitalization, there are always a handful of merchants who only accept cash as a form of payment for goods and services. For a small fee, prepaid cardholders are able to access and withdraw cash from an ATM machine by inputting their PIN or personal identification number.
No Credit Risks
As mentioned above, prepaid cards are not in any way linked or connected to any credit facilities, this means that there is no way that a prepaid cardholder can max out their credit. In addition, no credit checks are involved during the application process of a prepaid card. Hence, your credit score will never come into play. Ultimately, this could be massively beneficial for those who are in the process of building or re-building their credit rating for future financial plans such as mortgaging a car or housing, and even for business loan application.