You may hear prepaid cards called credit or debit cards. However, the underlying principle remains the same: you purchase a prepaid card, use it to make purchases, and then apply the purchased amount to the designated credit line. You are generally able to purchase prepaid cards from many retail establishments such as drugstores and banks. A number of other companies produce prepaid cards, although they are not widely available. For those that are unable to find a card at a retailer, some prepaid card manufacturers have entered into partnerships with banks to provide prepaid credit cards directly to consumers.
In general, prepaid cards function just like a debit card. You make purchases with the prepaid card and the value is applied to your bank account. The purchases you make are not considered cash advances and are reported to the credit bureaus as payments made on credit. Because there is no credit check required, you are better protected from fraud than if you had a debit card with a balance owing to you. You can check it out now on how to use this card.
In order to obtain a standard credit card instead of a prepaid card you will need to have a checking account. If you do not have a checking account, a deposit account might also be arranged for you. This deposit can be made without delay after you receive your prepaid card. When you wish to make purchases, simply write an amount in the card and the funds are immediately deposited into your account. The funds remain there until you spend them. Once you have spent them all, the funds disappear from your checking account.
Like direct deposit, prepaid debit cards are available at a variety of merchants and ATM and also here. In most instances, you can use the prepaid card to make purchases at any place that accepts debit and credit card transactions. You may wish to set up direct deposits every month. If this option is chosen, you must provide your bank with identification information so that they can deposit the funds into your account. Direct deposits may be delayed by bank processing time or by bank policy.
Prepaid cards are subject to a variety of fees depending on the provider. In some cases, you will be charged a service fee for every prepaid debit card that you issue. Some providers may charge a monthly fee for the use of a prepaid card. Others may charge a fee for ATM usage. There are no ATM fees with these cards and they are really the only way that you can guarantee cash advances, as there are no third party charges, such as ATM surcharges, which could result in your being assessed a late fee.
If you have a prepaid card but do not have an ATM account, you may choose to use the ATM machine where you receive your mail to withdraw cash. You must first select an ATM from the list provided by your bank. Using an ATM to withdraw cash is not recommended because it limits your access to your money if the ATM stops working. If you decide to use an ATM, it is best to use them only when you absolutely need to use them. When at home, choose an ATM that is located close to you to avoid having to travel too far from home. Check out this link: https://en.wikipedia.org/wiki/Finance for a more and better understanding of this topic.
