There are many payment options available to consumers today. Amid the world of plastic money, two cards, which have a great similarity between them, are debit and co-branded prepaid cards. These two cards can often confuse users and make them uncertain about which one to opt for. If you are facing a similar dilemma, keep reading to discover some facts about both of these cards:
Issuance of Credit. As prepaid cards are a means of using one's own money, no credit is issued with the use of this card. You can simply load your money and use it via a co-branded prepaid card, all over the world. On the other hand, although debit cards allow bank customer to withdraw amounts from their own accounts, there may be an overdraft facility provided by some banks.
Cardholder Eligibility in Terms of a Credit Check. It seems that banks issuing prepaid cards do not make their customers suffer much. There is absolutely no credit check. When it comes to debit cards, on the other hand, they would go for one to certify that their account holder does in fact have the right credit score and rating.
Card Fee. One of the best things about prepaid credit cards (especially the co-brand prepaid cards) is that they require only a minimum maintenance or opening premium while debit cards cater to a relatively different scenario. Their fee is in accordance with the bank account and will also include the costs of penalty for having overdrafts long overdue.
Are There Any Card Charges? A small maintenance or opening fee is usually charged in case of prepaid credit cards, especially for co-branded prepaid cards. While in case of debit cards, a certain fee is charged applicable to the bank account and penalty fee is also charged in case of overdue overdrafts.
The Credit to be Issued. Since prepaid cards are yet another method to use an individual's money, the person will not be issued any credit by means of using this card. In order to use it effectively anywhere in the world, you have to load the money and get it linked with a co-branded prepaid card. Most of the people are likely to find the debit cards more appealing for the fact that they have an overdraft facility even as they agree to let them withdraw the required amount from their account only.
Using ATMs. Not all of the prepaid cards empower a bank customer to be able to withdraw their money through an ATM whereas debit cards do facilitate their users with this benefit.
In conclusion, prepaid and debit cards have their similarities and differences. The cancellation and usage policy is almost the same for both. This indicates that these cards can easily be utilized all around the globe and can be cancelled in case of theft or loss.
Issuance of Credit. As prepaid cards are a means of using one's own money, no credit is issued with the use of this card. You can simply load your money and use it via a co-branded prepaid card, all over the world. On the other hand, although debit cards allow bank customer to withdraw amounts from their own accounts, there may be an overdraft facility provided by some banks.
Cardholder Eligibility in Terms of a Credit Check. It seems that banks issuing prepaid cards do not make their customers suffer much. There is absolutely no credit check. When it comes to debit cards, on the other hand, they would go for one to certify that their account holder does in fact have the right credit score and rating.
Card Fee. One of the best things about prepaid credit cards (especially the co-brand prepaid cards) is that they require only a minimum maintenance or opening premium while debit cards cater to a relatively different scenario. Their fee is in accordance with the bank account and will also include the costs of penalty for having overdrafts long overdue.
Are There Any Card Charges? A small maintenance or opening fee is usually charged in case of prepaid credit cards, especially for co-branded prepaid cards. While in case of debit cards, a certain fee is charged applicable to the bank account and penalty fee is also charged in case of overdue overdrafts.
The Credit to be Issued. Since prepaid cards are yet another method to use an individual's money, the person will not be issued any credit by means of using this card. In order to use it effectively anywhere in the world, you have to load the money and get it linked with a co-branded prepaid card. Most of the people are likely to find the debit cards more appealing for the fact that they have an overdraft facility even as they agree to let them withdraw the required amount from their account only.
Using ATMs. Not all of the prepaid cards empower a bank customer to be able to withdraw their money through an ATM whereas debit cards do facilitate their users with this benefit.
In conclusion, prepaid and debit cards have their similarities and differences. The cancellation and usage policy is almost the same for both. This indicates that these cards can easily be utilized all around the globe and can be cancelled in case of theft or loss.
About the Author:
Debit cards are a good option for those customers who already have bank accounts and will not be tempted to exceed their expenditure limits. However, for youngsters who do not have bank accounts and will be tempted to take loan, co-branded prepaid cards are the best option. So make the right decision today in accordance to your requirements!. This article, Debit Cards Vs. Prepaid Cards - Which Should You Choose? has free reprint rights.
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