About 68 million people don’t have an open checking account.
If you are one of those people, you may be able to benefit from having a prepaid card.
Security is not the only benefit of using prepaid cards. Keep reading for 7 essential benefits of using prepaid cards.
1. Don’t Have to Pass a Credit Check
One of the benefits of having prepaid cards is that you don’t have to pass a credit check.
Normally when you apply for a credit card, you have to apply, and they will check your credit score to see if they want to loan you money. If you have a bad credit score, this could become a problem.
However, getting a prepaid card isn’t as difficult. As long as you are eighteen or older and have a valid ID, you can apply to get a prepaid card. However, because there isn’t a credit check, it’s important to note that isn’t a credit card.
2. Won’t Go Into Debt
Another great thing about getting a prepaid card is that you won’t accidentally go into debt.
With a credit card, you can purchase things that you don’t have the money for, and this can end up getting you into a lot of trouble if you tend to not pay your bill.
Some people are able to budget their money and treat their credit card as if it is a debit card. However, for some people, it’s harder to manage.
This is why it’s great to have a prepaid card. You can use an app to manage your money, and you won’t be able to buy things that you don’t have the money for. Once the money is off that card, you can’t just keep buying more things like you could with a credit card.
If you are bad at actually sticking to your budget, this card may be a good choice for you.
3. Convenient
Another convenient aspect of a prepaid card is that they can be accepted in most places across the world, and you can even use it online.
As long as the merchant accepts MasterCard, Visa, or any other brand you may have on your card.
Now you won’t have to worry about bringing cash around with your or having it stolen. If you are traveling, it’s also a nice way to avoid having to find someone to exchange your currency.
4. Security
Prepaid cards also offer a level of security in protecting you and your money. Most cards now come with chips that protect your information instead of a magnetic stripe on the back.
This makes it more difficult for thieves to steal your information and use it. You can also protect your prepaid card with a PIN that you have to enter each time you use the card. Normally, they are only four digits long, but no one will be able to use the money on that card unless they know that number.
One thing a prepaid card does have in common with credit cards is that if your card is stolen, your money is protected. If someone did figure out your pin and put a bunch of charges on your card, you could call your bank account or provider and have them cancel the card.
They should reimburse you for the charges as well.
5. Easier to Manage Your Money
Most banks or providers will have some sort of way to log online and see all of your financials, making it even easier to manage your money.
If you get a Visa or MasterCard prepaid card, you don’t even have to have a bank account open to get one. They have tools that can help you save money and also protect your identity at the same time.
They have ways that you can transfer some of your money to your prepaid card from your paycheck so you don’t have to think about touching it or taking it out of savings.
These cards are great for young adults and college students if they are trying to learn how to manage their money for the first time.
6. You Can Shop Online
Now, so many more people shop online. It’s so much easier and more convenient, but it was impossible to do with cash.
But with a prepaid card, you’ll never have to leave your house to go to the store. A prepaid card will also protect you while you are shopping online.
Because this card isn’t linked to your credit score or limit, you won’t have to worry about someone stealing your identity from your card. If you use a card online, it will act as a virtual card, and the number should change each time.
This makes it harder for criminals to access your card’s information.
7. Can Have Direct Deposit
When you get paid, you won’t have to worry about getting the check, taking it to the bank, putting it in your account, and waiting a few days for it to show up.
Now, with direct deposit, the money can go straight onto your card. If you want to, you can take a picture of your check and deposit it through an app, but signing up for the direct deposit will be a much easier option.
When you sign up for a prepaid card, like the Visa or MasterCard, you will get an account and a routing number, which you can use to set up your direct deposit.
If you are trying to save money, this is a great way to not even touch the money.
Sign Up for Prepaid Cards Today
If prepaid cards sound like a great option for you, you should definitely sign up today!
It’s one step forward in being financially healthy and figuring out how to manage your money.
For more help on figuring out how to budget your financials, check out our blog posts!
Susan,
Enjoyed your piece about pre-paid cards. I have a particular situation developing, and the pre-paid card on the surface appears to be my answer. You did not however, mention how a prepaid card can be obtained via around the use of a bank. Can a card be obtained without the use of a bank or credit union? I have a foreign group I am in contact with and they are wanting to invest in the Carribean Islands, etc., and with my real estate and construction management background I am told I will be perfect for their needs for someone to guide them and get them set up. They will be paying me an upfront fee for my services. A down payment as it were, and am making the decision of whether to use a pre-paid card, or simply open a separate bank account for this purpose.