Prepaid cards no fees, reloadable credit cards, and other new financial instruments now available to consumers with a poor credit history are a just-in-time solution to problems with conducting financial transactions.
Due to the drastic change in our economy, with high unemployment rates, the value of money declining, and the rising cost of living, increasingly more people have poor credit histories. With so many people suddenly laid off work for no fault of their own, it is very difficult to keep credit scores intact despite the best of intentions.
Finally, those with poor credit need not be left out in the rain because they cannot access conventional credit cards like the ubiquitous MasterCard or Visa cards.
Prior to the advent of Prepaid card no fees and reloadable credit cards, it was almost impossible for those with poor credit to pay bills by phone or through the Internet. In an almost cashless society, those without access to some form of digital payment method were forced to drive miles for one or more hours to a pay a bill that could easily have been taken care of electronically in just a few minutes.
Prepaid cards, in a sense, have leveled the playing field, giving those with a credit score ruined by financial difficulties a chance to participate in the modern conveniences of rapid electronic calculations. These cards can be used with the same ease as those who still carry high interest credit cards.
7 Benefits of Prepaid Cards
These cards work in the same way as regular credit debit cards and also carry the MasterCard or Visa logo.
Here are 7 core benefits to these cards:
1. You can get these cards regardless of the past financial hardships that led to banks and credit card companies penalizing you. You can override their punitive efforts to make you play by the money game by their rules. While not all banks are as rigid about your credit history once you explain your financial difficulties, these more lenient and compassionate banks are hard to find and may not be available locally.
2. You can quickly access your money in the same way that you could access money using a bank issued debit card. You are protected in the same way by the MasterCard and Visa brand.
3. You need no longer worry about accidentally overdrawing from your account and facing harsh overdraft fees. These conditions associated with a traditional bank account are not applicable. You can only use the money you have deposited in your account and simply cannot spend what you do not have in it.
4. Similarly, you do not have to worry about balancing your checkbook since checks are not issued with these types of accounts.
5. There is no problem with making a deposit. You can deposit as much as you like in your account and many locations are available for you to make a deposit.
6. Your card will not be cancelled if you have no money in your account. A zero balance, unlike with a regular bank account, does not create the risk of your account being closed due to insufficient funds and no financial activity.
7. You cannot be turned down and need not be concerned with filling out application forms that will be refused.
Precautions to Observe
Since these cards are, in fact, financial instruments, you have to take the same precautions as you would with cash, checks, or regular debit or credit cards.
Here are some simple precautions to take to safeguard your well-being and your finances:
• Treat your cards with the same caution you would reserve for handling cash. You don’t want to leave these cards carelessly lying around your home or your office or make them easily accessible to pickpockets or purse snatchers.
• You will be issued a personal identification number (PIN) and this should be kept secret. Avoid sharing it with other people.
• Don’t mention confidential information about your cards via email or telephone.
• When using an ATM, be as wary of your surroundings as if you were using a regularly issued debit or credit card. ATMs pose two dangers: one, the people around you; and, two, illicit cameras and other devices thieves implant on or around the ATM to steal codes.
• If others are standing in close vicinity, shield the card with your hand when using a point of sale (POS) at a retail counter.
• Never allow cashiers or other people to enter your PIN on your behalf even if they offer to help you speed up the transaction at a cash register.
Although you may live in a safe neighborhood, only shop at trusted retail outlets and use safe ATMs and you may think these precautions unnecessary it is better to err on the side of excess vigilance than carelessness when your money is concerned.