With no interest rates, no transaction fees, high fraud protection and emerging rewards programs, pre paid debit cards are now being embraced by people. Yes, the public generally loves them and are easily replacing credit cards as a mode of payment. But, if you can’t borrow from a debit card how exactly does it work?
Here’s how. Whether they call it a check or charge card, they all mean the same a prepaid debit card. This card functions similarly like the old credit card. With a single swipe, shop online, pay a transaction and even shop abroad it can be easily done. The carrying of cash is simply eliminated in using these cards. No more danger posed since in carrying them for it is safely kept at the bank. With just a PIN needed or a signature, pay for things in an instant.
It is also called a check card since it functions like an electronic check. The owner need not write a check to pay for something. No need to carry heavy and space consuming checks, be scrutinized by a merchant or whatever inconveniences. And, a visa prepaid transaction will be most likely honored by merchants. Unlike checks who likely “bounce” debit cards frequently don’t. In just a second, a merchant can easily tell of the sufficiency of funds. If the funds are lacking, they can still charge it and the owner can pay for it later.
Yes, it also works like a credit card but with greater benefits. Some cards also allow borrowing of funds. Unlike credit cards who charge people with high interests rates, debit cards don’t. For a small amount borrowed, the overdraft fees are also minimal. This friendly charge makes it even more adorable to users.
Talking about adorability, pre-paid debit cards also give clients rewards! They can be air miles, points or other forms. This may seem minimal unlike the great rewards of credit cards, but they are still better. In using a credit card to earn rewards, a consumer is most likely inflicting debt upon himself. Credit card interests can easily double up if monthly bills are not paid on time. But, in using debit cards, the greater reward comes in the form of not borrowing from anyone. Don’t chase rewards, instead, chase a debt free life.
Sean Teahan co-founder of
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Tags: Cards, Debit Cards
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