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Prepaid Debit Cards: Could they be Just for the Underbanked?

Categories: Blog March 24, 2015 @ 8:48 AM 0 Comments      

Prepaid Debit Cards: Could they be Just for the Underbanked?

Prepaid debit cards have grown in popularity in the last few years, especially as more Americans feel the sting with the recession. In fact, prepaid debit card usage has climbed by 20 percent since 2011, and it's also expected to increase much more by the end of 2013. Prepaid Debit Card

While individuals with traditional bank accounts could have regarded prepaid an atm card as a product restricted to consumers with bad credit and the underbanked (people who avoid the use of traditional financial services for example checking accounts), experts agree that prepaid an atm card are ideal for the "already banked" also.

Some of the biggest names in banking start to tap this largely untapped segment of people. But what's the point should you already have a credit or debit card with your financial institution?

Prepaid Debit Cards Are Valuable for everybody

One of the many advantages of pre-pay credit cards over debit and credit cards is they don't allow people to rack up thousands of dollars of debt. A prepaid card operates just like a bank-account. The only funds available are those that are already about the card so the risk of overspending is virtually eliminated. A prepaid bank card is essentially a consumer's solution to the growing debt trouble in the United States.

More Benefits of Prepaid Debit Cards

Pre-pay credit cards offer several other benefits that go beyond just preventing from falling deeper into debt. Advantages in comparison to traditional debit and credit cards include:

� Prepaid cards make it easy and safe to pay for purchases in-store and online, pay bills, withdraw cash, and receive direct deposit of wages.

� Protecting you throughout the road. Your prepaid bank card isn't linked to your bank account, so you don't have to be worried about someone stealing your card and draining your account-or charging thousands of dollars in your name. Prepaid Visa

� Teaching teens how you can spend responsibly prior to being given access to their particular traditional bank account and credit card. Since a prepaid debit card is not linked to a financial institution account, they can't overspend and discover how to better manage their money.

� Protecting college students while at school. Prepaid campus cards enable you to directly deposit your college student's funds and possess financial aid automatically deposited onto their card. Jetski from your college student from being forced to walk around with quite a bit of cash or run a large amount of money in a financial institution account.

More "already banked" consumers continuously switch to prepaid an atm card to avoid excessive debt, curb spending, and lower the amount of money they lose in fees every month. Since the average consumer pays over 15 % on credit card interest, avoiding the usage of credit cards altogether can significantly reduce their credit burden as well as improve their credit score as they pay down debts and spend money smarter.

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