There is only one kind of prepaid card that is associated with big brands like Visa, Mastercard, and American Express. You may know them as prepaid debit cards but as per their usage, they are sometimes referred to as prepaid credit cards. Most people use these cards so that they can purchase anything that they want. The activation process of these cards is mostly the same as you have to visit your bank branch to get your card activated just like a normal debit card.
However, the activation process of gift cards is slightly different and you may not have to visit the branch for activating them. Suppose you have two cards one is the normal vanilla prepaid debit card and the other one is a vanilla gift card. For activation of vanilla debit cards, you need to visit your bank but for my vanilla gift card activation, you may not have to visit your branch. Gift cards are made to be used until they have balance in them and the prepaid cards can be reloaded as many times as you wish.
If you have a prepaid card with you then you just know the advantages and some disadvantages of using those cards, but those who are unaware of these facts can look down and understand their usage in brief.
- The prepaid card does not require any special income proof, and you can get it very easily from any online store or you can apply it online and get it delivered to your home.
- You are safe from any extra charge like the overdraft fees as the preloaded card doesn’t allow you to spend over the limit and thus you are saved from overdraft charges.
- All the checks that you get from the government as relief or benefit can be directly deposited into your account without any extra check charges. Even when you cash checks, you are supposed to pay a nominal fee for cashing but prepaid cards offer free of cost deposits.
- Usually, all the cards that you buy online are free of cost and you can apply for them online from their official website for free.
- They can be used easily in the place of credit cards to pay bills and make online payments as they are connected with Visa or Mastercard and every vendor accepts them.
- There are a lot of ATMs from where you can take out the cash from the card and load it from your bank account directly.
- Suppose you are a person who loves to buy stuff online or offline then, prepaid cards can be a costly deal for you as compared to credit cards. Transaction charges make them a little costlier when you overuse them.
- There is no free credit score option that you get with your credit card for shopping more. A credit score helps people to buy stuff with the score and save their actual money.
- There are some prepaid cards that do not charge you deposit fees but some cards charge you the deposit fee to and if you use them regularly then you may end up spending more money on the fees of the card.
- If you are using credit cards, you generate a credit score that not only helps you buy stuff but you get loans and advances, and other bank cards more easily when you pay off all the debt of the card within time. A prepaid card does not increase your credibility but a credit card does.