Prepaid cards can be a safer, more convenient alternative to debit and credit cards, offering a great alternative to cash.
These cards work just like traditional credit and debit cards—you can withdraw money from ATMs and make purchases online and in stores anywhere that accept traditional cards. In addition to these conveniences, prepaid cards can also effectively protect you and your finances.
Below are five ways in which using prepaid cards can help safeguard your finances:
Prepaid cards are quickly becoming the preferred payment method for those travelling abroad. They are simple to use—just select your card of choice, load it with holiday money, and use it just like any other card.
The big perk of using prepaid cards whilst travelling is that they’re safer to use than traditional cards and easier to conceal than cash. Unlike debit cards, if your prepaid card is lost or stolen, the potential risk is limited to the money loaded on the card—it’s not connected to any other accounts. And unlike cash, if your card is stolen, you can simply contact the issuing card company to block your card, and (depending on the issuing company) they may even be able to get you a replacement in the meantime.
According to Financial Fraud Action UK (FFA UK), consumer fraud rose by 26% last year alone, and online shoppers are some of the most vulnerable. Using a prepaid card while making online purchases can help to mitigate this risk.
Prepaid cards help to reduce the danger of consumer fraud by restricting the amount of potential loss. Debit and credit cards are linked to either your bank account or line of credit, and in the event of fraud, you run the risk of losing your savings or having your credit destroyed. A prepaid card prevents this kind of damage because it is limited to the stored value on the card itself, and nothing else.
No Credit Check
Prepaid card applications do not require a credit check, whereas all traditional credit cards do. These credit checks create a “footprint” on your credit report, which can be seen and accessed by other lenders. Other lenders can then calculate your credit score, which can have a negative impact on future borrowing.
You will never spend more than what you possess with prepaid cards. Prepaid cards allow you to spend only what is already loaded on them; debit and credit cards on the other hand, allow to you spend more, resulting in overdraft fees, debt, and bad credit.
You’re at the Controls
Reloadable prepaid cards make it easier to control your spending and follow a set budget. Many people overspend when using credit cards, simply because credit is available. With prepaid cards, however, it is easier to manage your money, because you will only be able to use the amount preloaded on your card. Once a card’s balance drops to zero, it must be re-loaded, which offers a built-in emergency brake on spending.
Prepaid cards put you in full control of your finances, making them the safest and most secure solution for daily expense management.