Prepaid cards or debit cards are a boon for those who have to deal with voluminous cash transactions on a daily basis. Find out the pros and cons associated with these cards.
Debit cards serve to be helpful aids for customers looking for smarter means of transacting with their bank accounts. These plastic ATM cards offer easy access to direct deposits and flexible payments options; along with the added comfort of paying bills online. The only point to be noted is that users have to load their bank accounts with money before going in for purchases online (or at retail outlets).
Here, we take a quick look at what debit cards have on their cards for you.
Here Comes the Pros
Are you looking for a debit card even after holding a credit card? Such cards are extremely convenient to use. By holding and using the right debit card, you can be assured of limiting your spending to the amount present in your bank account. This is because you cannot spend more than your held balance. Unlike credit cards that may drag you into a debt, you are not charged with any interest for the expenses made by you; in other words, you are using your own money and not any borrowed amount.
The other advantages of applying for a debit card are listed below:
- Easy and convenient processes of approval without the requirement for any credit worthiness checks.
- Certain liability protections are also offered with debit cards.
- These cards can be efficiently utilized for online shopping via PCs and mobile phones alike.
- They make it easy to access cash through ATM machines.
The Associated Cons
Prepaid debit cards do not enhance your level of credibility because they do not inform credit bureaus about your payment records. Thus they never improve upon your credit score. Moreover, debit cards cannot be used in every situation.
The other cons associated with prepaid debit cards are the following:
- They might be accompanied by fees for opening and maintaining the account, which can be quite expensive.
- Some debit cards levy a small fee for purchases made online or at merchant outlets.
- These cards are designed to showcase lesser protections against fraud when compared to credit cards.
- They might turn out to be costlier than opening up a chequing account or using the ATM card for withdrawing cash.
The associated fees and charges may vary from one card to the other. So stay informative, and enjoy the comfort provided by the prepaid debit cards of your choice. You will not be disappointed.