Prepaid debit cards are perfect for those who do not have a bank account, or need help budgeting money. For example, kids and teens.
In fact, kids and teens can easily get a prepaid debit card.
Having a prepaid debit card also eliminates the need to carry and use cash, keeping money safety and security a top priority.
Prepaid debit cards are certainly nothing new. But many people, especially parents, are wondering what a prepaid debit card is, and how do prepaid debit cards work?
What is a prepaid debit card?
A prepaid debit card is exactly how it sounds, a debit card that has a specific amount of money put in the account to use. This could be $20 to hundreds of dollars.
The best feature of a prepaid card is that you, or a family member, can only spend the limit in the prepaid debit card account.
And merchants accept prepaid cards like regular debit cards or credit cards, since these types of prepaid accounts are supported by a bank, Visa, and/or MasterCard.
This way of banking, spending, budgeting, and saving is much safer and more convenient than using cash, or non-reloadable cards you will find in grocery stores.
How do I get a prepaid debit card?
It is actually pretty easy to get a prepaid debit card for you, your kidddo, or another family member.
There are large banks. And there are private financial companies that combine prepaid cards with savvy tech. This makes the process of saving and budgeting more fun.
And as a parent, you still have oversight over your kid’s account. For instance, the Treasure Card pairs an exciting financial education mobile app with a prepaid card.
This helps kids learn important financial responsibilities without large bank oversight, which could damage a person’s long-term financial future.
What’s the difference between prepaid debit cards, debit cards, and credit cards?
This is a very common question. Many people don’t see the difference between having a regular bank account with a debit card vs. a prepaid debit card.
Let’s break it down:
- Prepaid debit cards. These cards are a pay before banking model, supported by big banks or private financial companies. You can prepay using cash, check, direct deposit, or transfer from an account to the prepaid account. It is that easy. No overdraft fees, no financial spankings with long-term credit problems.
- Debit cards. Regular old debit cards are a pay now model. You use your checking account money directly, but run the risk of overdrawing and having plenty of big bank fees.
- Credit cards. This is the pay later model we all know well. You make a purchase based on the limit your bank has set, and then get a bill to pay off later. This can be great for building credit, but can also cause big time problems later.
As you can see, there are a few differences. But the most appealing, especially for those who need a bit of financial education, is a prepaid debit card.
Is a prepaid card right for me and my family?
This is a very important question to ask. Prepaid cards definitely have a place, however, they are not for everyone.
If you are a financially savvy person who already has great spending and saving habits, a prepaid card is probably not for you.
But what about your kids? Could they benefit from a safe and secure way to learn about budgeting, saving, and financial responsibility?
This is what a prepaid card was made for. Teaching and learning. And who is more vulnerable to making future financial mistakes then kids and teens.
Questions about prepaid debit cards? We have the answers. Feel free to contact our team, and check out what the Treasure prepaid card and mobile app can do.