Advantages Of Using Prepaid Debit Cards

Some consumers are starting to see how a prepaid debit card gives so much convenience. Although credit cards are also useful, there are a few benefits a prepaid debit card have that credit cards don't. Here are some of the advantages of using a prepaid debit card:

1. Set your own spending limit. Because prepaid cardholders are not given credit lines, they cannot be used for advanced purchases. That limitation can actually be an advantage. Decide how much you plan to spend with your debit card each month. Once you made the deposit, do your best to follow the plan. Don't be tempted to make a new deposit when the cash in your debit account has been used up. Stick to your budget.

2. Safer for travels and shopping around. You can carry prepaid debit cards everywhere. If you need to buy groceries or buy something from the mall, you don't have to bring a large amount of cash. Are you going on a trip? Instead of bringing large cash in your wallet, consider bringing a prepaid card instead. You can use it to buy souvenirs, pay at diners or car rental services. You can even use it to buy your plane ticket. However, just like a credit card, a debit account can be frozen in case the card is misplaced or lost. All you need to do is call issuer immediately.

3. Avoid bad debt. It's not a credit card so you can only use it for shopping if you have existing funds in your account. When you purchase with a debit card, there is no need for repayment. The purchase will be automatically paid using the money in your account.

4. No credit check. People with no credit history or has bad credit history can still enjoy having prepaid cards. Your credit report will not be checked upon application. There is no risk of rejection.

5. No monthly bills. As the name suggests, the card is prepaid so you won't have to worry about monthly bills sent to your mail or debt collection in any way.

6. Have cash withdrawals from any ATM at any time. There might be instances that you will be needing cash so you can simply go to the nearest ATM and withdraw form your debit account. Parents can use prepaid debit cards for sending cash allowance to their kids.

7. Can be used locally and internationally. Prepaid cards with Visa or MasterCard logos are accepted in all States of the US and many other countries worldwide. Leading merchants and even small business establishments today accept this method of payment both offline and online.

8. Build credit history. The good news is that there are prepaid debit card issuers today that offer credit reporting. Yes, anyone can now use it for building credit. Whether you are a student or someone who has never applied for credit, you can start by using a debit card. Remember to ask the prepaid card company if they provide credit reporting service to the 3 major credit bureaus (Experian, Equifax, TransUnion).


Copyright (c) 2009 Tara Tiemann