What Is A Prepaid Debit Card?

Prepaid debit cards are simple to use and put you directly in control of the balance. A prepaid debit card holds only the amount a cardholder deposits, can never be overdrawn, and is accepted almost anywhere, just like a credit card.

If you’re thinking about getting a prepaid debit card, consider this:

  • Because you don’t borrow funds with a prepaid debit card, there’s no interest to worry about and no way to damage your credit when using them.
  • The initial and deposit fees charged by most prepaid debit card companies are much smaller than the cost of a credit card account, with no overdrafts, late payment fees or hidden charges.
  • Prepaid debit cards do not link to any other accounts and do not affect your credit, so they are an excellent way to keep yourself safe from identity theft.
  • In most instances, merchants accept prepaid debit cards in the same way they accept conventional credit or debit cards, even online. As long as the card has the logo of one of the common providers, such as MasterCard, it can be used anywhere that brand is accepted.
  • Prepaid debit cards are an excellent way to monitor your spending. You can only spend as much as the account contains and no more until the next deposit. That means no overdrafts and no going over-budget.