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Why Prepaid Cards Are The Hottest Financial Trend Going

[Wednesday, March 22nd, 2017]

Prepaid cards are suddenly everywhere, it seems. Teenagers have them, college kids have them, parents have them, and even grandparents are using them.

If you don’t know what a prepaid card is, however, you’re not alone. Although the cards are more and more ubiquitous, there is still some confusion about how exactly they work, and what the difference is between them and other types of credit or debit cards.

Here, then, is a quick primer on what prepaid cards are, how they work, and why they’re the hottest thing going right now.

What is a prepaid card?

A prepaid card is a reloadable payment card that’s similar to a gift card, in that it has money already on it, ready to be spent. You can use it anywhere that accepts credit cards as a form of payment, as long as they accept the issuing network of your particular prepaid card. American Express, Visa, and Mastercard issue prepaid cards, among others. The difference between prepaid cards and gift cards is that in most cases, gift cards can’t be refilled after you spend their value. Also, gift cards are generally issued by a specific retailer or store, and can only be used there.

How does a prepaid card work?

A prepaid card functions in many ways like a bank account. You can add funds to it by direct deposit from your employer, or have government payments or tax refunds credited to them. You can also pay bills using your prepaid card, or get cash from an ATM. When your prepaid card runs low, you simply add more funds to it, either by going to a location where you can put cash onto the card, or my transferring money from a bank account, savings account, or even a credit card onto the prepaid card.

Why are they so popular?

Many people like using these cards as sort of “starter credit cards” for their teenagers, to help them learn how to use a payment card. They are not actually credit cards, but are used in a similar way, helping kids become accustomed to sliding a payment card in a point-of-sale terminal and keeping track of balances.

Some people are also using them in place of traditional bank accounts. Using a prepaid card can help you avoid fees commonly charged by banks for regular checking accounts.

See also

Q: The Hottest Payment Trends To Watch For In 2018

Every year, there’s something new in the payment space, whether it’s an amazing new travel rewards credit card, free credit score reports for cardholders, or new ways to utilize mobile payment technology.

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Q: A Beginner’s Guide To Prepaid Cards

Question: When is a credit card not a credit card?
Answer: When it’s a prepaid card.

Do you know the ins and outs of prepaid cards? If not – if, perhaps, you aren’t even entirely sure what a prepaid card is – then this article will tell you all you need to know.

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Q: The 4 Types of Cards Most People Carry

Most of us have wallets packed with plastic—but what exactly is it that we’re carrying around, anyway? It’s not just credit cards, although the average household has more than three credit card accounts.

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Q: Prepaid Cards: A Guide to the Different Types

When it comes to prepaid cards, it’s not unusual to get a little confused as to the different types out there. Prepaid cards are more popular than ever and no two are exactly the same.

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Q: 5 Things You Can Do With a Prepaid Card

Prepaid cards are increasing in popularity, with more and more people becoming wise to the benefits of using cards instead of cash. But even if you’re already a pro at using prepaid cards, you may not know all the things you can do with it.

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