Prepaid Debit Card vs. a Credit Card
A prepaid debit card is a smart way to budget money since you’re required to pre-load funds onto the card before using it. Once the money’s gone, you either have to stop spending or reload the card’s balance.
However, with a credit card, anything you charge to the account will have to be paid off, making it a lot easier to get into debt. Research has shown that it’s a lot easier to overspend using a credit card, while a prepaid debit card is like spending your own cash.
Here are three reasons to consider using a prepaid debit card instead of a credit card.
- Allows you to earn cashback.
One of the biggest reasons that many people prefer to use credit cards over prepaid debit cards is because they can earn cashback or rewards on all their purchases. However, many prepaid debit cards allow you to earn the same perks without having to charge up debt on a credit card.
Use your prepaid debit card for all your daily purchases and keep track of the rewards you’ve earned. Nearly all prepaid cards are accepted everywhere that regular credit cards are, so there’s no limit on where you can use them.
- Has much lower fees.
Credit cards come with a wide variety of fees, including late charges, high interest rates, and over-the-limit fees. Some even come with an annual fee you have to pay in order to simply use the card.
Prepaid cards do not come with any of these fees, and may only have small monthly fees or ATM charges when withdrawing cash. You’ll never pay an interest charge, or late fee (because there are never any payments due).
- Make safe and secure purchases online.
Whether you’re doing some online shopping, or need to pay bills online, a prepaid debit card makes it easy, safe, and secure.
In some cases a prepaid debit card can be considered more secure for online transactions than a regular debit card. It’s not connected to your bank account, so you don’t have to worry about your account number being compromised, or having your identity stolen.
While credit cards do have their perks, like allowing you to build credit, there are many other disadvantages to them. If you have some credit card debt, or have trouble overspending, a prepaid debit card is smart way to help keep your finances on the right track, while avoiding high interest rates and fees.
You can keep more of your money, not overspend, and even earn cashback on everyday purchases. For these reasons, using a prepaid debit card is a win-win.
Looking for the credit card that’s best fit for you? Get personalized credit card offers from Quizzle. Find one that matches your needs and credit history.