Copyright (c) 2009 Tara Tiemann
If you already have a credit card, why would you consider applying for a prepaid debit card account? First, let's discuss how this cards differ from regular credit cards and the benefits that it provides.
What are Prepaid Debit Cards?
As the name implies, this card are prepaid or paid in advance. Unlike a credit card - which gives you the option to charge purchases in your account and pay for them at a later time, this card doesn't provide a credit line. Instead, it requires its holder to submit cash in his/her account. This cash savings will then be used to pay for the debit cardholder's future expenses.
Like regular a credit card, this card can be used as a method of payment in shops, supermarkets, gasoline stations, diners, boutiques, online stores, and anywhere else credit card payment is accepted. If your debit card carries a VISA or MasterCard logo, you can be sure that it will be accepted by almost all types of merchants and establishments.
PrePaid Debit Cards vs Checking Accounts
In the past, people who do not want to carry around cash issue checks as payment. Today, prepaid debit cards are undoubtedly taking the place of cash advance checks. Why? First, it is more convenient to pay in debit card than issuing a check. Second, you won't have to open a checking account and go through with a complicated application process.
Using Prepaid Debit Cards for Internet Shopping
More and more people use prepaid debit cards to shop over the internet because it allows them to purchase online without revealing their credit card details or bank account information. If you want to buy something from an online store, you can deposit an exact amount in your debit account to make the purchase.
PrePaid Debit Cards vs. Pay Checks
Prepaid debit cards are also used in government offices, private firms and small businesses to distribute employee salaries. You can also use prepaid debit in paying your freelance workers with ease.
Prepaid Debit Cards vs Credit Cards
Prepaid debit cards do not provide a credit line and for some people, this can be a big disadvantage. However, if you want to save & limit your expenses, it is wiser then, to use debit card than credit card. Aside from reducing the risk of incurring bad debt, another advantage of this card is that it helps you prevent from making unnecessary purchases.
Aside from having a regular credit card, some people find it advantageous also to apply for a prepaid debit card. They usually reserve their credit card for emergency and large purchases especially if they need to pay for their balance in monthly installments. You can take advantage of this provision especially if your credit card offers a 0% APR for a certain time period. Meanwhile, debit cards can be used in purchasing products from the internet. If you don't want to reveal your credit card information or banking information on the web, a debit card is the perfect purchasing tool for you.
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Tara Tiemann is a credit analyst of Go-preid.com and has been a resource site for people who want to live debt free! If your on a budget using
pre-paid credit cards and
pre-paid cell phone services can save you big money!
