Prepaid Cards Offer Fewer Fees And More Perks For A Wide Range Of Consumers
More and more people are figuring out that the best way to avoid credit card fees and unnecessary bank charges is to use a prepaid card — otherwise known as a general-purpose reloadable prepaid card. These cards are increasingly popular among all demographics, including Millennials, small business owners, and people who are self-employed.
A report from Packaged Facts, called Prepaid and Gift Cards in the U.S, 6th Edition, spells out some of the reasons these cards, which might more accurately be called prepaid accounts, rather than prepaid cards, have become so popular. Chief among them is that folks are fed up with paying annual fees for checking accounts and credit cards.
Prepaid accounts offer flexibility, and their ability to fulfill multiple financial functions makes them appealing to a broad audience. Besides making purchases and getting cash from an ATM, people can transfer funds, pay bills, set aside money in special savings accounts, and even earn rewards and take advantage of discounts when using a prepaid card.
Money management tools are a big benefit
Almost every major prepaid card brand offers cardholders the ability to track spending, receive alerts, create budgets, and save money in set-aside accounts. These money management tools, which don’t cost any fee, give customers the ability to take charge of their finances while making payments, receiving direct deposits, and withdrawing cash when necessary.
Many credit cards charge high fees, and even higher interest rates, for withdrawing funds from an ATM. One of the most appealing things about prepaid cards is that using them never involves an over-the-limit fee, a late payment fee, or an interest charge. That’s because customers use funds that they’ve already loaded onto the card, rather than accruing debt they have to pay back later on.
While credit cards have their place and also offer great financial management tools, prepaid cards are a great option for those who want to avoid credit card fees, prevent themselves from going into debt, or worry about whether their credit score is high enough to be approved for a card.