Prepaid cash cards are similar to debit cards, however, debit cards are attached to a bank account, while the former are known as nonbanking cards. Simply put, these cards are not linked to a bank account and come with fees every time you have to reload them. There are also ATM fees and several other types of fees. Much like a gift card without the restrictions of store specific cards, these cards can really help a person that would otherwise be unable to do something as simple as booking a hotel room.
One good reason to use prepaid cash cards is to replace the conventional credit card. Avoiding all the nasty pitfalls of unsecured credit and spiralling into the financial abyss. I've known a few small business owners who struggled to get enough credit to help them grow their businesses. But being strictly cash made it very difficult to do things like rent a car on a business trip. They finally decided to try a prepaid cash card which helped eliminate that issue while saving the business from extra fees and interest they would have paid with a conventional card. Yes there were a few other small fees involved, but when you add up the savings on interest alone, they were still able to save money.
These cards are available at several financial institutions and carry well known credit card logos as well. They are not covered by the FDIC, however, so one would do well to thoroughly research each institution and the cards themselves before deciding to carry one. This can be done through the Internet by reading a good deal about the various benefits on various web sites to help you make the best choice possible.
This type of non credit spending can be of great budgeting assistance as well. Just like using a conventional credit card, you can get a statement that can help with itemized spending. You never have to worry about over limit spending fees and since the card is prepaid, you know the money is already there to pay for your purchases. No worries or concerns with end of the month payments and no hassles.
Prepaid cash cards can also be the answer for those who need a fresh start with credit but have no ability to get credit. The biggest challenge is that at this time, there are no credit builder programs available with these types of cards making it difficult to rebuild your credit. This is a shame since a person who is able to show themselves financially responsible and has record of such responsibility should be allowed to regain a small credit line.
Again, it is always wise to do your due diligence and research all your choices before making a financial decision. It will be worth counting the cost.
Article by Louis, CardKudos.com
Get more info and tips about prepaid cash cards as well as related credit card articles such as credit card comparison at Cardkudos.com.
