Prepaid Cards Common Facts and Myths

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When we talk about new tools and technologies, it is understandable that it would require a bit of time (and effort) before you can get to know the basics, much more all there is to know about them. Innovative financial tools such as prepaid cards are no exception.

Although credit and debit cards have been around for decades now, many people still consider them relatively new. Many see prepaid cards as a recent FinTech innovation so many people have come to appreciate and love. The mere number of people using prepaid cards nowadays is a clear testament of how far it has come.

Since prepaid cards are considered new, it follows that not everyone knows everything there is to know about it yet. That said, it is safe to assume there are many myths that are floating around that pertain to prepaid cards. Below are some of the most widespread prepaid cards and the truths about them.

Myth #01: You won’t be qualified to get a prepaid card if you have bad credit.

Nothing can be farther from the truth. When using a prepaid card, you won’t be borrowing money from the bank or getting the money from your checking or savings account. Instead, purchase transactions and ATM withdrawals that you do using your prepaid card will be deducted directly from the balance that’s available on your card.

That said, prepaid card issuers won’t look into your credit standing when issuing prepaid cards. Getting your hands on a prepaid card is both straightforward and quick. You won’t need to submit confidential information or submit financial documents. In addition, you also won’t have to wait for so long just to get your application approved.

Myth #02: Prepaid and gift cards are one and the same.

Since they share so many surface similarities, it is easy to mistake one for the other. However, the truth is prepaid cards and gift cards are different. To begin with, gift cards are purchased at grocery stores and can be used only once. On the other hand, prepaid cards can be used repeatedly and countless times.

As long as there is money still available on your card, you can use it as many times as you want. In addition, you can also use your prepaid cards for ATM withdrawals. On the contrary, gift cards can’t be used for ATM withdrawals.

Myth #03: Only the unbanked can use prepaid cards.

Fortunately, there is no truth to this. Anyone can use prepaid cards—business owners, avid travellers, smart budgeters, students, parents—pretty much everyone. Even those who have debit or credit cards can also use prepaid cards since it also offers utter convenience and ease that’s hard to match.

Also, since prepaid cards are very easy to obtain, they have become a great alternative even for those who have access to other plastic cards. What makes them ideal is the charges and fees associated with prepaid cards are minimal but their benefits, functionalities, and features are hard to beat.

Myth #04: Reloadable prepaid cards cannot be used for online purchases.

Thankfully, there is no truth to this. The truth is you can use prepaid cards for online transactions. All you need to do is visit the website that sells what you are looking for, find the items you want to purchase, then key in your prepaid card number. The entire process can be done in just a few minutes.

The great thing about it is you can do your shopping right in the comfort of your own home or office. No wonder more people have come to love online shopping as well as their prepaid cards all the more.