While a reloadable prepaid card looks identical to a credit card and can be used pretty much like a debit card, it is actually in a league all its own. That being said, it’s not really surprising that reloadable prepaid cards have become massively popular over the years.
In fact, in 2010 alone, reloadable prepaid card users loaded a whopping $40.85 billion on their cards. According to a study conducted by Mercator Advisory Group, the figure is up by as much as 43 percent compared to the year prior.
Loading money onto a reloadable prepaid card can be done in a variety of ways and can vary from one issuer to another. However, some of the most prevalent ways of loading money onto a reloadable prepaid card include direct deposits, bank transfers, reload cards, and secure online portals.
If you are one of the many who’s considering getting a reloadable prepaid card, consider it wise to brush up on the basics first before taking the plunge:
You will be sharing financial and personal information.
Let us crush a common misconception: reloadable prepaid cards are different from gift cards. That means you can’t present it on the counter for purchases just like you would a gift card.
Another thing that makes reloadable prepaid cards different from gift cards is they are designed for long-term use. This would mean you’ll be required to provide a few basic personal and financial information when setting up the card.
Typically, you will be asked to provide your full name, address, birthdate, phone number, and social security number. If you intend to reload the card using your existing bank account, you will also be asked to provide a bank account number.
You will enjoy some freebies and perks.
Some reloadable prepaid card providers entice prospects by providing perks, freebies, and benefits that are often associated with credit cards. For instance, some issuers provide protection in case of lost, stolen, and broken items that were purchased using the reloadable prepaid card.
Typically, it is required that you report the transaction within 90 days from the purchase date. Others also provide users global assistance by offering medical and legal aid when travelling abroad.
Customer service provided can vary from one issuer to another.
Regardless of who issues the card, they are more or less similar in terms of function. However, they can differ vastly when it comes to customer service. While some issuers provide customer service that involves human interaction, others only provide automated voicemails or email contact to those with questions and concerns.
Fees and charges can also vary from one card to another.
Some reloadable prepaid cards will charge for some transactions done using the card—from usage, activation, to balance inquiry. However, this does not always apply to all. That being said, consider it best to set aside time to review, research, and understand all the possible fees and charges you can incur when using the card. Doing so can also help warrant you are able to use the card to your full advantage.