Prepaid Debit Cards


Prepaid Debit cards are not credit cards in true sense though these cards are accepted as credit cards by the merchants because the card carries the credit card brand like Maestro, MasterCard, and Visa etc. Prepaid debit cards are preloaded with deposit amount and the card holder can use that card for the purchases to the extent of the deposit amount. The deposit amount automatically becomes the limit for such cards. Prepaid debit cards though act as a credit card in terms of acceptance by the merchants yet it helps the card holder to control the amount to spend.

There are various kinds of prepaid cards available in the market. The most sought after are:

  1. Prepaid Travel Cards: This is the most widely used prepaid debit card. With globalization, travelling abroad has become quite a frequent event and it is always not possible to carry traveler’s cheque or cash.Prepaid travel card now a days are used quite frequently and is also safe. Almost all the banks now issue Prepaid Travel cards to travelers and it is quite easy to reload the card once the deposit is over.
  2. Gift Cards:  Gift cards are issued in different denominations and can be purchased based on the customer need. It mostly ranges between $5 to $500. Most of the gift cards have a validity period and a charge for renewal.
  1. Prepaid Payment Cards: these are prepaid cards used for some specific purchases like groceries from a particular retail outlet or for a cell phone bills or gas/fuel etc.
  2. Prepaid Teen Cards: Prepaid teen cards are issued to teens on behalf of their parents/guardian who maintain an account with the card issuing financial institute and have a preloaded amount to check the purchasing power of the teens.

Applying for and processing the prepaid debit card is easier and faster as compared to traditional credit cards. The application process however is same as a traditional credit card application requiring all the details necessary. In case the applicant is an existing customer of the card issuing institute than it is easier and faster. However, the applicant is not supposed to file a credit score for these kinds of cards along with theapplication. The application can be made at the branch or at an agency location in person or through internet.

The processing also is quite fast since in a prepaid debit card, the card issuing financial institute does not have to undergo a credit history check of the applicant. There is also no need to establish any credit worthiness of the applicant since the card is preloaded and the applicant has already paid for the same. Once the applicant pays for the requisite deposit the card is instantly issued to him for his usage. The card is accepted as a credit card at the merchant establishment and the purchase amount is deducted from the deposit. Once the deposit is over, the card holder can request for re-loading the card with the desired amount or can purchase a new card.