The Benefits of Prepaid Cards

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The Benefits of Prepaid Cards

If you do not want to carry large amounts of cash with you, traditional bank accounts are not for you, or you have a difficult time qualifying for a credit card, prepaid cards may be right for you.

These cards, which you pre-load with funds, allow you to make purchases, both online and offline. You can also use them to withdraw money from ATMs.

However, there are a few things you should know before making the decision to go prepaid.

The Benefits of Prepaid Cards

You do not have to submit to a credit check or a review of your employment history to acquire a prepaid card.

The reason is that you are directly providing the funds for your prepaid card with your money. Say you deposited $1,000 on a prepaid card, you now have a balance limit of $1,000. You cannot spend more than that, though you can increase your prepaid card's balance whenever you'd like.

Another advantage? These cards are easy to get, and you can qualify for them quickly. In fact, you can usually purchase prepaid cards in minutes online. Once you load the cards with money, you are free to start using them.

You'll find that the majority of stores, restaurants, gas stations and supermarkets will accept your prepaid card. You can also use your prepaid cards at ATMs to withdraw quick cash when you need paper money.

Finally, prepaid cards offer protection. Because your purchasing power is limited to the amount of money on your card, you cannot overspend.

Beware of Fees

One thing to keep in mind is that prepaid card companies may charge fees for various transactions.

Some providers of prepaid cards will charge you a fee -- often as high as $4 -- when you use your prepaid card at certain ATMs. Others might charge you a small fee for every transaction you make with your prepaid debit or credit card. These can add up.

Other providers of these cards will charge you if you try to withdraw more money than what you currently have in your account. If you do not keep careful track of your spending, you will run the risk of incurring this fee.

If you are aware of the fees and you take the steps necessary to avoid them, you might find that prepaid cards are the right option for you. To ensure you find the right prepaid card for you, explore the features and benefits of various options.

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