While both debit and credit cards have been used since the early 70s, many still consider prepaid cards as an ingenious and breakthrough FinTech innovation. However, even if considered relatively new compared to their counterparts, prepaid cards have been a favorite among many since first introduced.
Nowadays, it’s not surprising that more and more people have become familiar with how prepaid cards work since this innovative financial instrument was introduced a few decades ago. That said, it is not also surprising that many people have countless myths and misconceptions about prepaid cards.
If you want to give prepaid cards a try, it is ideal that you explore more than just the basics so you will be able to make the most of this truly beneficial tool. To help you figure things out more easily, below are some of the most common prepaid card myths and misconceptions and the truths and facts behind them:
Prepaid cards work just like gift cards
This is not true. It is important to remember that gift cards can be bought at grocery stores and are designed for one time use alone. On the contrary, prepaid cards are created and designed for repeated use given that money is loaded onto the card each time the balance is all used up.
Once all the balance that is available in the gift card has been depleted or consumed, the card is rendered useless. Prepaid cards on the other hand can be used as many times as you like as long as the balance available on the card is enough to cover your transactions.
Unlike gift cards, prepaid cards are not disposable. Prepaid cards also provide exciting and enticing benefits and perks that gift cards do not offer.
Only those individuals with no bank accounts can get prepaid cards
Again, this is also not true. Even if you do have a bank account, you can still easily get your hands on a prepaid card should you want to. The truth is, pretty much anyone, from parents, entrepreneurs, wise budgeters, down to teenagers who want to learn proper money management can get prepaid cards if they want to.
You won’t be able to get a prepaid card if you don’t have good credit
Even if your credit card rating is not exactly desirable, you would be delighted to know there is no truth to this. You have to keep in mind that prepaid cards don’t come with credit capabilities. In other words, unlike credit cards, you can use your own money and not that of the bank or another issuer.
Also, since there will be no credit involved, individuals with prepaid cards are not as picky about the people they provide credit cards to. It also means that even if the credit standing is not desirable, it won’t hinder you from getting a prepaid card and enjoying all the peerless benefits only prepaid cards can offer.
In addition, aside from the opportunity to enjoy all the perks prepaid cards offer, those with prepaid cards are also spared from all the inconvenience and hassles that come with providing personal information as well as all the financial documents when they apply for a prepaid card.
Understandably, there are many misconceptions and myths floating around regarding prepaid cards. However, as long as you know the facts and truths behind them, deciding if a prepaid card is right for you should come easy. In addition, the ability to separate fact from fiction can also help you make the most out of this amazing tool.