When a new tool is introduced, it is understandable that there will be misconceptions about it especially among new users. One of the newest financial tools, the reloadable prepaid card is no exception. While traditional plastic cards like the debit and credit cards have been around since the 70s, prepaid cards are considered new.
Since it is seen as relatively new, it is not surprising that many users are still not familiar with how reloadable cards are used. It’s safe to assume they are also not experts when it comes to figuring out which of the information they come across are truths or just myths. In this article, we will cover the common reloadable prepaid card myths and the truths behind them:
Reloadable Prepaid Card Myth #01: You Cannot Get or Use a Prepaid Card If You Have a Bad Credit Score
This is not true. Those who use a reloadable prepaid card won’t be interacting with banks since they won’t be borrowing money. That said, their credit scores won’t be taken into account and won’t be a requisite before they are given access to reloadable prepaid cards.
Fortunately, just like credit or debit cards, you can also use your reloadable prepaid card for purchase transactions and ATM withdrawals. In addition, if you want to get a reloadable prepaid card, you won’t need to submit any financial documents or submit confidential information just to get your application approved.
Reloadable Prepaid Card Myth #02: Gift Cards and Prepaid Cards are One and the Same
While it is easy to mistake one for the other because of their similarities, prepaid cards are actually different from gift cards. For starters, gift cards can be bought at grocery stores and can be used only once.
This means you will need to buy another gift card once the balance on your gift card has been depleted. In addition, reloadable prepaid cards have a higher limit and can be used for ATM withdrawals and purchase transactions.
Reloadable Prepaid Card Myth #03: Only Those With No Bank Accounts Can Use Prepaid Cards
Prepaid cards are typically used by parents, smart budgeters, freelance specialists, business owners, and travelers. Simply put, this amazing financial tool can be used by pretty much anyone, not just individuals who don’t have access to banks or bank accounts.
Reloadable prepaid cards can also function as an additional account for those who have access to banks. The fees and charges of reloadable prepaid cards are also very minimal but their features and functionality are truly exceptional.
Reloadable Prepaid Card Myth #04: Reloadable Prepaid Cards are Prone to Security Breaches and are Not Safe to Use
There is no truth to this. The truth is reloadable prepaid cards are considered very secure. Some credit cards also come with two-factor authentication, similar to some debit cards. Each time the card is used for ATM withdrawals, you will need a PIN to ensure all your transactions are protected and secured.
Reloadable Prepaid Card Myth #05: Reloadable Prepaid Cards Can Be Overdrawn Just Like Credit Cards
If your bank account has an overdraft feature, it can be a lot easier for you to spend all the balance that’s available on the card. Thankfully, with a reloadable prepaid card, your spending is limited by the balance that is on the card.
As such, reloadable prepaid cards are used by parents who want to teach their children the importance of managing their money and not spending beyond their means.
Reloadable Prepaid Card Myth #06: Reloadable Prepaid Cards Can’t Be Used for Online Shopping
Online shopping is one of the best things you can do using your reloadable prepaid card. Furthermore, since reloadable prepaid cards are not linked to any savings or checking account, you won’t be compromising any of your account or personal information.