Prepaid Debit vs. Credit

Personal Loans  Debit and Credit Cards  

Prepaid Debit vs. Credit

You like the convenience of online shopping but don’t have a credit card? Or maybe you have a credit card but don’t like using it to make online purchases. Not to worry. Prepaid debit cards are a great alternative and, in many ways, even preferable to using credit cards online.

Pick a Card. Any Card.

Most online retailers, and certainly all the brand-name retailers like eBay and Amazon, accept prepaid debit cards. The tricky part is choosing which card to go with. There’s a plethora of choice out there so you’ll need to do a little research, weigh the pros and cons, compare the advantages and disadvantages offered by different cards before making your choice. Monthly maintenance fees, ATM usage fees, transaction charges, minimum/maximum reloads – these are all things you’ll want to consider before making your final choice. Some cards, for example, require minimum reloads of $50 or more which may or may not work for you. But finding the right card won’t be difficult because, again, there’s plenty of choice out there. A little research is all it’ll take to find the card that best suits your purchasing needs.

Budgeting Made Easy

So, you’ve found your card of choice and you’re keen to start using it. If, like so many of us, you’re one of those shoppers who can sometimes get carried away, the prepaid credit card offers one great advantage. Because you yourself determine how much money to put on the card, you’re always aware of your spending limits. In this way, the card provides a built-in budgeting mechanism and a convenient way to self-police your online spending.

One caveat, however. You’ll need to figure out the best, that is, the most economical way to fund your card. Adding funds to your card at retail locations can be pricey – typically $3.00 to $5.00 – so you’ll want to watch those funding charges and find the most economical way to reload. Some cards, for example, allow no-fee direct deposits from your employer. Funding costs is another consideration when choosing your card. Find a card with funding options you’re comfortable with.

Easy-schmeasy Prepaid Debit

Once you have a loaded card in hand, purchasing is easy. Having made your selection and checked your cart to verify pricing, shipping charges, etc., you’ll be given the option of paying by credit or debit card. Having chosen debit, you’ll fill out the requested card information just as you would when paying by credit card – i.e. card number, expiration date and the three or four-digit security or signature panel code you’ll find on the back of the card. One word of advice: once you submit your order, be sure to note your order confirmation number before moving on. You never know when you might need it.

Paying by prepaid debit card is certainly much more convenient than, say, using a third party online payment system like PayPal. And there are other advantages as well to using a prepaid debit card. Maximum reloads help you to manage your spending organically; hit your reload limit and, for sure, your card will let you know. In addition, most cards provide online account management and transaction histories enabling you to continuously monitor your online purchases, change your pin number, report damaged, lost or stolen cards, and catch any fraudulent transactions when they occur, should they occur.

Safer than cash with none of the interest carrying charges associated with credit cards. You have to ask yourself. What’s not to like about prepaid debit cards?

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