Lack of access to a bank account, a financial slump, or an underwhelming credit score are all good reasons to use a prepaid debit card. These cards function much like regular debit cards, but without the need for a checking or savings account to link to it. There are even different varieties for different needs. Some focus on kids, while others are aimed at shopping at certain stores. During the pandemic, the NYC government even issued $100 digital prepaid cards to incentivize people to get vaccinated against Covid-19.
The use of prepaid debit cards has been on the rise in recent years, which may make you wonder what these cards can do that credit cards can’t. The fact is, prepaid cards have a different purpose. Credit cards are great for shoppers who are flush with cash. But more regular folks are turning to prepaid debit cards as a financially wise option created to meet their specific needs.
Understanding the Differences Between Prepaid Debit and Credit Cards
With prepaid debit cards, users load money in advance in order to use the cards like they would a debit card. Regular (a.k.a. “general purpose”) cards typically have the logo of brands such as Visa, MasterCard, Discover or American Express and can be used where credit cards are accepted. As you use it, those dollars you loaded onto it are deducted from the card. This helps you avoid spending money you don’t have. You can use one for a short-term need or continue loading on more cash.
Over 191 million Americans have credit cards, but many people struggle to pay off their debts. That’s because credit cards are based on money you may not yet have. The user is essentially borrowing money they will have to pay back, either in full by the due date or at a later date with interest. The average family has roughly $6,270 in credit card debt, and the inability to pay can snowball into significant financial difficulties, not to mention the stress that goes with being unable to pay off their cards.
The Many Benefits of Using a Prepaid Debit Card
As previously mentioned, regular prepaid debit cards are used much like credit cards. The cards are generally safer and more convenient than carrying cash, and they address the fact that many stores are no longer accepting cash altogether. But they’re also great for children’s accounts, allowing Mom or Dad to add whatever amount of funds their kids may need for school supplies or lunch money.
Some of the other benefits of using a prepaid debit card include:
- Secure form of payment
- Not tied to a bank account
- No minimum balances
- No hidden fees or interest charges
- No overdraft penalties – you only spend what you have
- Great for budgeting
- No bills to pay after purchasing
However, do a little research to find out what type of card makes sense for your particular financial situation. It’s always a good idea to compare a few alternatives and ask about any possible fees that may come with any type of card. You’ll also want to hold onto your prepaid debit card once you get it. If it is stolen, the money remaining on it may not be reimbursed to the owner.
Getting a Prepaid Debit Card at a Currency Exchange Is Easier than You Think
The differences between card types can sound a little complicated at first. But getting a prepaid debit card is as easy as walking into a store – specifically, one of the many neighborhood Currency Exchanges throughout the country. Anyone with a little cash on hand has access to a prepaid debit card. Unlike a bank account, the ability to obtain one doesn’t hinge on one’s financial history or lingering debts.
All you need to do is
- Bring a government-issued ID and your social security number to your nearest Currency Exchange.
- Bring cash or another form of payment.
- Your brand-new prepaid debit card will be activated immediately.
You leave with the comfort of knowing you have plastic in your pocket that can be used just like a credit card, only without the downsides.
No need to feel limited when you want to spend your money – CFSC’s prepaid debit cards are universally accepted for use at thousands of locations. When you start experiencing the perks of using a prepaid debit card, you may never go back to credit cards again! Stop by to see what else we can do for you today.