In this digital age, there are several modes of making payments other than having our transition done via fiat money. There are options of online banking, plastic money and other payment instruments issued by the banks and other financial institutions.
The growth of digital literacy in different parts of the world in recent years has ensured that everyone could avail the benefits of the modern technological wonders. The prepaid cards are an addition to this league of financial instruments which has a huge potential to make our transactions yet easier.
So what exactly is a prepaid card? Prepaid cards generally work like debit cards. Here the users have access only to the amount of money in the account. One could easily apply for a prepaid card as banks generally do not ask for a credit check before providing these cards.
Once they sign up, cardholders can put money in the card through direct deposit. It’s different from a debit card in that where the debit cards are linked to the users’ checking account, which is not the case with prepaid debit cards. For a prepaid card, one has to pay in advance in order to load funds in the account. Using these cards, one could make payments for online purchases and household bills.
The following pointers could help you to understand these cards in a better manner:
1. Prepaid cards are an alternative to banks: There are many people out there who do not have any access to the formal banking institutions. Hence the prepaid cards offer a brilliant solution to many people and thereby make their life quite easier.
2. Prepaid cards are available to those with poor or no credit: For those consumers who have poor credit history or low credit scores in recent times, this is a brilliant option.
3. Different Ways: Most of the prepaid cards allow users to withdraw cash from ATMs and send PIN number for the very purpose. Then there are cards which allow users to pay bills online and authorize payments for creditors.
4. Easy Reloading: In case you have spent all the money loaded in the prepaid cards, you will have to reload it again. So in case you need to put more money in the account, reloading is quite simple and easy.
5. All cards are different: One would be required to pay fees for initially getting a prepaid card for a bank or any other financial institution. Even in these cases, all prepaid cards have different fee structures where a few of them might even offer free transactions.
6. Protection: Like the credit and debit cards, prepaid cards offer adequate protection in cases of theft or loss. Even at the time of online payments, these cards are the best way to protect you against any online fraud or misuse of any your crucial information.
There are many banks out there in Kenya which are providing prepaid cards for their customers. It would always be different experience for the new users where they could explore more possibilities of financial institutions. #Buzz