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What Is A Prepaid Card And Why Would You Get One

Submitted by vealboozer on Wed, 11/29/2023 - 07:00

Parents who are looking to teach their kids how to use plastic in a relatively low-risk way may want to opt for a prepaid card over a debit or credit card. And if you’re someone who struggles to spend within your budget, a prepaid card can help you learn how to manage money.Prepaid cards provide a relatively simple securespend account activation way to pay for purchases without taking out a line of credit or using a bank account. And they pose less risk since you have to load money onto the card in order to use it — perfect if you’re worried about overspending or misplacing your credit card and giving fraudsters access to your credit limit.

While prepaid cards are an alternative to bank account linked debit cards, they have limitations, especially if you want to build credit. If you plan on establishing a credit history, opt for a credit card instead.You can often find prepaid cards at checkout lanes when you’re at the supermarket, typically next to gift cards. Similar to a gift card, you add value to the prepaid card before you can use it, which is essentially like prepaying for future purchases.

You can load money onto your prepaid card in a variety of ways, including: direct deposit, cash at the register at participating retailers, transfer from checking or savings accounts and checks using the mobile app.Prepaid cards can be used to make purchases and pay bills, just like debit or credit cards. They are accepted nearly everywhere since they are often backed by a major card network, such as Visa, Mastercard or American Express.