Are you thinking of applying for a prepaid card? This this article is worth recommended as it provides information on important things you should know about prepaid cards.

What are prepaid cards?

Prepaid cards are a type of card that is not associated with any bank account. All you can spend is the money you’ve put in before. Obviously, this means you don’t have to worry about paying interest or spending beyond your limit, as you would with a credit card. Prepaid cards are a payment method often used by students or a young audience when they depend on their parents’ income or where access to a bank account or credit card is difficult.

One point worth mentioning is that prepaid cards are much easier to apply for, because you only need your ID

You don’t need a bank account

Because prepaid cards are associated with card networks and not banks, you don’t need a bank account to use one. This eliminates the hassle of dealing with banks while offering all the flexibility and freedom of a bank card. Prepaid cards do have identification numbers, so they can usually be topped up from any bank account by a simple transfer.

Prepaid cards are protected

Most providers protect the balance on their prepaid cards. If you report a lost or stolen card, your balance will be transferred to a new card. This gives users additional security and peace of mind, since most systems are safer and easier to use than a bank account.

Prepaid cards are global

Unlike some bank cards that are acceptable in certain countries, most merchants that accept cards will accept prepaid cards, no matter what country you’re in. Prepaid cards allow you to travel abroad without carrying large amounts of currency while ensuring you can keep buying what you need. One last use you might be interested in is for family members visiting from other countries. With the prepaid they can recharge their card and use it when they need it, instead of having to carry cash or use ATMs at all times that will charge them a fee.

Author Bio:

Hi, I am Nikesh Mehta owner and writer of this site.

I’m an analytics professional and also love writing on finance and related industry. I’ve done online course in Financial Markets and Investment Strategy from Indian School of Business.

I can be reached at nikeshmehta@allonmoney.com. You may also visit my LinkedIn profile.