There are many payment options available to consumers today. Amid the world of plastic money, two cards, which have a great similarity between them, are debit and co-branded prepaid cards. These two cards can often confuse users and make them uncertain about which one to opt for. If you are facing a similar dilemma, keep reading to discover some facts about both of these cards:
Will There Be Any Credit Issuance? There is no credit issuance with the use of a prepaid card. It is a simple process of loading your money and using it through a co-branding prepaid card across the world. However, there is an overdraft facility for debit cards by the banks even though debit card holders can easily withdraw money from their accounts.
Credit Check for Card Eligibility. In case of prepaid cards, no credit check is performed before issuing a card to the customer. However, in case of debit cards, banks will usually perform a credit check to ensure the credit score and rating of the account holder before issuing a card to them.
Card Fee. One of the best things about prepaid credit cards (especially the co-brand prepaid cards) is that they require only a minimum maintenance or opening premium while debit cards cater to a relatively different scenario. Their fee is in accordance with the bank account and will also include the costs of penalty for having overdrafts long overdue.
Card Charges. Prepaid credit cards are often charged with a small opening fees or maintenance charges, especially in cases of co-branded prepaid cards. On the other hand, debit cards with be charged with any fees applicable to the bank account, as well as any penalty fees applied to overdrafts that have become overdue.
Do They Require Customer Information? Complete background information of the customer is required in order to issue a debit card. However, in case of prepaid cards, merely a few basic details are needed from the customer.
ATM Usage. Although debit cards can be used at ATMs, the same cannot be said for prepaid cards. There are very few prepaid cards, which have this facility available of being able to withdraw money from your account via an ATM.
In conclusion, prepaid and debit cards have their similarities and differences. The cancellation and usage policy is almost the same for both. This indicates that these cards can easily be utilized all around the globe and can be cancelled in case of theft or loss.
Will There Be Any Credit Issuance? There is no credit issuance with the use of a prepaid card. It is a simple process of loading your money and using it through a co-branding prepaid card across the world. However, there is an overdraft facility for debit cards by the banks even though debit card holders can easily withdraw money from their accounts.
Credit Check for Card Eligibility. In case of prepaid cards, no credit check is performed before issuing a card to the customer. However, in case of debit cards, banks will usually perform a credit check to ensure the credit score and rating of the account holder before issuing a card to them.
Card Fee. One of the best things about prepaid credit cards (especially the co-brand prepaid cards) is that they require only a minimum maintenance or opening premium while debit cards cater to a relatively different scenario. Their fee is in accordance with the bank account and will also include the costs of penalty for having overdrafts long overdue.
Card Charges. Prepaid credit cards are often charged with a small opening fees or maintenance charges, especially in cases of co-branded prepaid cards. On the other hand, debit cards with be charged with any fees applicable to the bank account, as well as any penalty fees applied to overdrafts that have become overdue.
Do They Require Customer Information? Complete background information of the customer is required in order to issue a debit card. However, in case of prepaid cards, merely a few basic details are needed from the customer.
ATM Usage. Although debit cards can be used at ATMs, the same cannot be said for prepaid cards. There are very few prepaid cards, which have this facility available of being able to withdraw money from your account via an ATM.
In conclusion, prepaid and debit cards have their similarities and differences. The cancellation and usage policy is almost the same for both. This indicates that these cards can easily be utilized all around the globe and can be cancelled in case of theft or loss.
About the Author:
Debit cards are a good option for those cardholders who already have bank accounts and will not be tempted to reach their expenditure limits. On the other side, for youngsters who do not have bank accounts and will be tempted to take loan, co-branded prepaid cards are the best option. So make the right decision today in accordance to your needs!. This article, Prepaid Cards Or Debit Cards - Which One To Select? is released under a creative commons attribution license.
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