When it comes to storing our money, it is understandable that you want to take every precaution possible. You have worked hard for your money and the last thing you should have to worry about is losing it for absolutely no reason. Although many companies and alternatives may seem like a great option, it is important to analyze everything accordingly.
Prepaid credit cards have become a popular method and product that individuals use today. However, there are a few important details that we want to tell you about. Prepaid credit cards may look good on the outside, but on the inside it is not all it seems to be.
A non-traditional structure
It is understandable for individuals to think that if they put their money in a regular bank, then they can’t trust it. However, it is beyond a reasonable doubt that traditional banking institutions are setup to protect your money as much as possible. If for some reason a major situation occurred with your bank account, then your money is typically insured. Nonetheless, with a prepaid credit card, you may not have that same type of protection. Prepaid cards that are lost, stolen, or used may leave you high, dry, and broke with no form of recourse based on terms you previously agreed to.
Daily limits for purchasing and withdrawals
Many prepaid credit cards come with purchasing and withdrawal limits that you have to abide by. Unlike a regular debit/credit card, the money that you currently have in your account is yours with no limits. With prepaid credit cards, it does not matter how much money you have put into the account/on the card, you are given a set limit per day (24 hours) that you are capable of utilizing.
This could become a huge detriment to your daily life. If you absolutely need to spend a large amount of money for essential products and/or bills immediately, if it is above the limit they (the prepaid credit card provider) allows, then you are going to be out of luck.
Incurring fees (monthly, for activation, and due to inactivity)
With traditional bank accounts, as long as you keep a specific amount (typically small depending upon the card you have), monthly fees are omitted. With prepaid credit card alternatives, you will have to pay some type of fee per month. Even if your understand that the monthly fee is to have the card active, over time even small fees in what you may consider "pennies" on a monthly basis will add up quickly. The fact is that a $5.00 monthly fee is $60.00 a year you could buy something more important with.
Tough economic times and a lack of trust in banks is no reason why you should make unwise decisions about the money you do have. By understanding why prepaid credit cards are a scam you can actually keep more money in your pocket. Most prepaid companies are sourced by banks that would provide you with accounts that let you keep all of your money if a minimum balance is maintained. At Oklahoma paystubs we want you to succeed in business and in life and offer this advice free of charge.
This business is owned and operated by a U.S. veteran. The protection of your information is our TOP priority.