Most Common Prepaid Card Myths Debunked

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While credit and debit cards have been used by many people since the 70s, the best prepaid cards are still considered a new FinTech innovation even until now. However, even if deemed new, the best prepaid cards have actually been a favourite for the past decade or so.

Since prepaid cards have only been introduced just a few years ago, it’s understandable that not many people have in depth knowledge about them and how they really work. Not only that, there are also a lot of misconceptions and myths floating around about this ingenious financial tool that many people don’t know the truths to. 

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If you are considering getting a prepaid card, it would be wise to know more than just the basics. In this article, discover the most prevalent misconceptions and myths about this amazing financial tool and the truths behind them.

Myth #1 

If you have bad credit, you won’t be able to get a prepaid card

Truth 

Definitely not true. You have to keep in mind that unlike credit cards, prepaid cards don’t come with credit capabilities. That means each time you use your prepaid card, you are using your own money and not that of the issuer or the bank.  

In other words, since there is no credit involved, prepaid card issuers are not very particular about who they issue prepaid cards to. This also means that even if your credit standing is less than desirable, it won’t hinder you from enjoying all the amazing benefits prepaid cards offer.

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In addition, apart from the chance to enjoy all the perks and benefits prepaid cards offer, users are also spared from all the inconvenience and hassle of providing financial and personal documents just to get approved.

Myth #2 

Only individuals who don’t have bank accounts are given prepaid cards

Truth

False. It is reassuring to know that prepaid cards are not limited to people with bank accounts. If truth be told, almost anyone can get a prepaid card. Teenagers, parents, wise budgeters, entrepreneurs, or anyone who would like to manage their money better can get access to a prepaid card.

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Nowadays, prepaid cards are also considered an exceptional and practical alternative for those who don’t have a credit card or a banking account. What’s even better? Even if you’ll enjoy amazing perks and benefits, you are spared from paying those costly interests and transaction fees.

Myth #3 

Prepaid cards work exactly the same way as gift cards

Truth

There is no truth to this. Come to think of it, gift cards are generally sold at grocery stores and are designed to be used only once. On the other hand, prepaid cards can be used repeatedly as long as money is loaded onto it. 

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As far as gift cards go, it is considered useless once all the available balance has been consumed. Prepaid cards can be used for as long as you wish given money is available on the card. In other words, unlike gift cards, prepaid cards are not disposable. They also come with enticing perks and benefits that gift cards don’t normally offer.

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