Prepaid debit cards are one of the many different types of financial products available to consumers today. Typically, these cards are geared toward individuals with a poor credit history or those who have not yet established a credit history. Purchasing or enrolling in a prepaid debit card program allows the customer to purchase items anywhere the card is accepted, including online retailers. A prepaid debit card delivers flexibility in purchasing with a simple enrollment process.
Credit and debit cards are exceptionally useful for several reasons. When purchasing an item online or over the phone that requires upfront payment, a credit or debit card is required. While traditional stores accept cash, checks, or money orders as payment, these options are not usually available for online or phone orders. Those who have a prepaid debit card can use the card in the same manner as a traditional debit or credit card for an online or phone purchase. As a result, having a prepaid debit card provides a wider range of choices while shopping.
For those who have experienced credit-damaging events in the recent past, such as divorce, bankruptcy or repossession, it can be very difficult to get approved for a credit card. A prepaid debit card is much easier to obtain, as there is no need for a credit check or a specific credit score, and a prepaid debit card can be used at all of the same retailers as a traditional credit card. Also, ChexSystems is not utilized for prepaid debit card applications, so applicants with previous checking account problems can still obtain a prepaid debit card.
Some of the additional benefits of a prepaid card include direct deposit, no overdraft fees and ATM use. Direct deposit can easily be set up for a prepaid debit card, so that a regular paycheck or government benefit check is automatically added to the available card balance. Also, there are no overdraft fees on a prepaid card, as any amount of purchase above the available balance is automatically declined. Debit cards can be used at an ATM for a cash withdrawal, and many companies provide a list of locations that are available for use without a surcharge.
A prepaid debit card offers many of the features of a traditional debit card, and is accepted worldwide. Consumers should always shop around prior to choosing a prepaid debit card and compare various offers to locate the most affordable option. For customers who would otherwise have difficulty gaining approval for a debit or credit card, a prepaid debit card is an ideal solution.