If truth be told, the best prepaid cards have a lot in common with traditional plastic cards like debit and credit cards. However, while they look very similar on the surface, they are actually in a league of their own. That said, it is not surprising that the popularity of the best prepaid cards rose dramatically.
In 2010, a staggering $40.85 billion was loaded to prepaid cards by users according to a study done by the Mercator Advisory Group. According to the same study, the figure is higher by 43 percent. There are various ways to load money onto your prepaid card and the options will depend on the choices provided by the bank.
Online portals, direct deposits, and bank transfers are some of the most prevalent ways to load money onto the card. If you are considering using a prepaid card, below are some of the prepaid card basics you need to keep in mind:
Essential Fact #01: You will enjoy exciting perks and freebies.
Many prepaid card users are enticed by the perks, freebies, and other exciting benefits provided by issuers. For instance, some prepaid card providers offer protection for lost or broken items that were purchased using the card. In most cases, reporting the transaction within 90 days from the purchase date is required to enjoy the benefit.
Essential Fact #02: Consumer protections you can enjoy can vary from one provider to another.
While marketed as the best alternative to debit and credit cards, not all prepaid cards will offer the same protection. Basically, the rationale behind this is some of the protections provided to credit card users such as responsibility, disclosure act, and accountability does not apply to prepaid cards.
Fortunately, most, if not all users of prepaid cards observe the same safety regulations that credit cards are required to adhere to.
Essential Fact #03: You will share only minimal financial and personal information when applying for a prepaid card.
Let’s set one thing clear: while often mistaken as gift cards, prepaid cards are very different. Unlike gift cards, prepaid cards are not created for one-time purchases or use. On the contrary, prepaid cards are designed for long-term usage. In other words, you will be asked for both financial and personal information when applying for one.
The big difference is the personal and financial information you will provide will be very basic—typically, just your name, social security number, birthdate, and phone number.
If you want to load money onto your prepaid card through your existing bank, you will be typically asked to provide your bank account number. However, that is pretty much it. You just need to provide basic personal and financial information and you are good to go. You won’t need to undergo those pesky financial and background checks.
Essential Fact #04: Customer service you will enjoy can vary from one prepaid card provider to another.
While most prepaid cards are considered identical in terms of function, the same can be said when it comes to the different customer service they provide. For example: while some prepaid card issuers will provide their cardholders with human interaction, others will offer email contact or automated voicemails to customers.