Prepaid Debit Cards: Are They Just for the Underbanked?

Prepaid Debit Cards: Are They Just for the Underbanked?

Prepaid atm cards have grown in popularity within the last few years, especially as more and more Americans feel the sting with the recession. In fact, prepaid bank card usage has climbed by 20 percent since 2011, and it is expected to increase a lot more by the end of 2013. Prepaid Debit Cards

While people who have traditional bank accounts may have regarded prepaid debit cards as a product restricted to consumers with a bad credit score and the underbanked (people who avoid the use of traditional financial services for example checking accounts), experts agree that prepaid atm cards are ideal for the "already banked" as well.

Some of the biggest names in banking are beginning to tap this largely untapped segment of the population. But what's the point should you already have a debit or credit card with your financial institution?

Prepaid Debit Cards Are Valuable for Everyone

One of the many advantages of pre-pay credit cards over debit and credit cards is they don't allow consumers to rack up thousands of dollars of debt. A prepaid credit card operates just like a banking account. The only funds available are those that are already on the card so the likelihood of overspending is virtually eliminated. A prepaid debit card is essentially a consumer's means to fix the growing debt problem in the United States.

More Benefits of Prepaid Debit Cards

Prepaid credit cards offer several other benefits that go beyond just preventing you against falling deeper into debt. Advantages compared to traditional debit and charge cards include:

� Prepaid cards ensure it is easy and safe to cover purchases in-store and online, pay bills, withdraw cash, and receive direct deposit of wages.

� Protecting you during your the road. Your prepaid bank card isn't linked to your bank account, so you don't have to concern yourself with someone stealing your card and draining your account-or charging lots of money in your name.

� Teaching teens how to spend responsibly before they are given access to their particular traditional bank account and charge card. Since a prepaid bank card is not linked to a financial institution account, they can't overspend and discover how to better manage their funds.

� Protecting college students while in school. Prepaid campus cards permit you to directly deposit your college student's funds and also have financial aid automatically deposited onto their card. Waters unmanned . your college student from needing to walk around with a large amount of cash or run a large amount of money in a financial institution account. Prepaid Debit Cards

More "already banked" consumers will continue to switch to prepaid an atm card to avoid excessive debt, curb spending, minimizing the amount of money they lose in fees every month. Since the average consumer pays over 15 % on credit card interest, avoiding the use of credit cards altogether can significantly reduce their credit burden and also improve their credit score because they pay down debts and spend money smarter.