A prepaid card can be used as a standard debit card and allows holders to make purchases, receive and send cash, pay bills, add cash free of charge, and make free withdrawals.
Types of Prepaid Cards
Credit card companies and banks offer different products, including youth cards, virtual and gift cards, and travel and convenience cards. Customers can choose from two varieties, disposable and reloadable, and the latter can be topped up multiple times. American Express prepaid card is offered by high street retailers, online companies, and banks and can be used as pocket money accounts. Prepaid products are offered to start-ups and entrepreneurs, customers with tarnished credit, students, and frequent travelers. Prepaid cards can be used for foreign visits, travel abroad, entertainment, shopping, hobbies, and other expenses, and clients don’t pay interest.
Rewards, Cashback, and Other Prepaid Cards
Issuers offer different prepaid options, including incentive cards, payroll cards, and general purpose cards. Prepaid payroll cards, for example, are used to transfer employee compensation, including salary, commissions and bonuses, and wages. General purpose cards are usually reloadable and can be used to withdraw cash, make purchases, and pay travel and other expenses. They are offered by American Express, MasterCard, Discover, and Visa and can be used to book a hotel room or pay for card rentals. Some cards feature rewards such as bonus fuel discounts, shopping discounts, free groceries, and other perks. Customers can choose from temporary and personalized cards with bonus points earned on brand merchandise and other purchases. Some issuers also offer cashback prepaid cards with shopping discounts, cash rebates, and other bonuses. Customers are offered cash back for holidays, big-ticket purchases, DVDs, groceries, and other big purchases and everyday spending. Holders can choose from multiple categories, including mobile phones, insurance, home and garden, and gifts. Other categories that earn cash back include health and beauty, entertainment, electrical, DVDs and CDs, mother and baby, and others. Bank clients enjoy many perks such as special and seasonal offers, vouchers, promos, freebies, and travel rewards. Some cards are designed for dependents, including young adults, teenagers, and students and the goal is to promote financial responsibility.
Requirements
Prepaid cards feature quick approval and no income requirements, and borrowers with a history of distrainment of accounts, late payments, and personal bankruptcy meet the criteria. To apply for a prepaid card, customers fill in their country, address, date of birth, and other information. Customers specify whether they apply for a business or personal prepaid card, language, and currency.
Fees
Some prepaid cards go with low annual fees while others charge monthly maintenance and retail purchase fees. There are issuers that charge АТМ withdrawal fees, balance inquiry fees, teller cash withdrawal, and foreign transaction fees. Many issuers charge no bill payment fees, card to card transaction, and signature and PIN transaction fees. Some cards go with high transaction, monthly, and activation fees, one-time purchase, and cash withdrawal fees and should be avoided.