How Are Reloadable Cards Different From Debit And Credit Cards

by David Jenyns on November 23, 2011

Reloadable debit cards also called prepaid debit cards are a safe and hassle-free alternative to make purchases or payments for products online or offline. After you get your card, the initial thing you need to do is put money into it. The maximum amount you can load at one time varies among providers. Once your funds are depleted, you can reload the card either online or at the retail location where you purchased the card, transferring funds from your bank account or giving cash up front. 

The major dissimilarity between reloadable cards and debit and credit cards is that with the former you can only make use of the money you loaded. Debit cards in contrast typically have an overdraft option which allows you to pay for goods and services even in cases when you don’t have money in your account. 

Naturally, this overdraft protection has a convenience charge attached to it, which is quite substantial. Overdraft fees can run as high as $38. While overdraft protection is indeed helpful, in the hands of an imprudent cardholder, they can put one at risk of debt, worse bankruptcy. This is also true for credit cards since the APRs, punitive charges for delayed payments, as well as yearly charges that come with them can accumulate quickly if you don’t keep track of your spending. 

The great thing with prepaid cards is that they do not come with too many charges. In most cases, they come with no activation and maintenance fees. Additional charges for transactions made using prepaid debit cards are uncommon and whenever applied are relatively small. Reloadable cards are also easier to get than credit cards since your credit and employment history are not evaluated. Moreover, as opposed to debit cards, prepaid cards aren’t connected to your savings or checking account, therefore the risk of your money being wiped out by illegitimate payments. 

Prepaid cards are safe and convenient alternative to carrying cash, especially when going on a trip abroad. ATM withdrawals using reloadable cards are possible but are rarely done because most providers usually charge for second and subsequent withdrawals made. Because of their modest requirements and the benefits of using them, prepaid debit cards are becoming increasingly popular. There are plenty of financial establishments which offer the said product. Two of the best prepaid debit cards are discussed below. 

Considered among the best prepaid debit cards is Netspend, which is also widely regarded as one of the oldest in the industry. The company also operates its own website, netspend.com , where their terms of business can be found. With a Netspend debit card you don’t have to check your account balance through an ATM, you can do that online by logging on to netspend.com. 

Another prepaid card provider with a strong online presence is AccountNow. The URL to their official website is accountnow.com. The company was established only in 2004 but it has managed to earn a number of recognitions. Accountnow.com’s success is attributed greatly to its reliable customer support.

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