Prepaid debit cards work almost like a combined credit card and current account. They are issued by a Bank holding company and branded by major credit card companies such as Visa, MasterCard, Discover or American Express.
Money loaded on prepaid cards, like gift cards. Then you can use the card like a credit card and accepted at most places that accept credit cards. While the use of credit cards, the financial side is like a checking account. The money spent is deducted from the total balance. There is no opportunity to spend in excess of this balance.
Prepaid debit cards can be a convenient solution when you need to present a credit card for different transactions, especially for people who do not have access to banking facilities, lack of knowledge or trust, how Banking works, or is blocked on the banking system due to bad credit ratings. They are also a popular option for gift because of the protection in case of loss or theft. In fact, they replaced cash as the preferred gift for those reasons. Money can’t be spent online, but the money on prepaid debit cards can. And, unlike gift cards, prepaid debit cards can be used at the ATM to get cash.
Prepaid debit cards are one of the fastest growing niches in the financial sector. The number of sold cards is expected to grow 22% annually from 2015 to 2020, according to projections by the Bureau for financial consumer protection. The total dollar value loaded on these cards is expected by 2020 will almost double to 116 billion.
A large number of Americans do not participate in the banking system for various reasons. Prepaid debit cards is a preliminary step toward allowing them to join him. For more information, see How to find the right debit card.