When new tools and technologies are introduced, it is understandable that there will be myths and misconceptions about how it should be used and how you can make the most out of it. Such is the case with one of the most recent additions to the plastic card family—the reloadable prepaid card.
This might not be common knowledge but reloadable prepaid cards have been around since the 70s. However, compared to other plastic cards, it is considered one of the most recent additions to the FinTech innovation. Since they are new, it is understandable that many people still don’t know the ins and outs of using one.
In this article, we will cover all the basics you need to know about reloadable prepaid cards as well as the truths behind some of the most prevalent reloadable prepaid card myths and misconceptions:
Myth 1
Reloadable cards can’t be used to shop online.
Truth
Nowadays, online shopping is considered one of the most inviting activities you can do using your card. In fact, many consider them as the ideal plastic card for online purchases. Since the card is not linked to the savings or bank account, users won’t be putting any of their money or personal information at risk.
Myth 2
Reloadable prepaid cards can be overdrawn
Truth
Bank accounts with overdraft features can make it very easy for users to spend beyond the balance available on the card. Fortunately, spending is limited by the balance that is available on the card if you are a reloadable prepaid card user. This feature makes prepaid cards the best option for those who want to teach their children the value of money.
Myth 3
Reloadable prepaid cards can be susceptible to breaches and are risky to use
Truth
There is no truth to this. Reloadable prepaid card users can attest that the card is very safe and secure. Just like some plastic cards, many prepaid cards have a two-factor authentication feature. That said, a PIN is required each time the card is used for ATM withdrawals. This is important so the withdrawals transactions stay protected and secured.
Myth 4
Only individuals with no bank accounts can use prepaid cards
Truth
Nothing can be farther from the truth. Prepaid cards are used by almost everyone, from smart budgeters, frequent travelers, business owners, to freelance specialists and parents who want to teach their children smart money management. That said, reloadable prepaid cards can be used by everyone, even those with bank accounts.
The use of this great financial tool is not limited to the banked and unbanked. Anyone who would like to use one can have easy access to it and can obtain it without any hassles. This also means they won’t have to go through those pesky background and financial checks just to use one.
Myth 5
Gift cards and prepaid cards are the same
Truth
While many people can easily mistake one for the other, the two are actually different from each other. Gift cards are typically sold at grocery stores and they can only be used once. Once all the balance that is available on the gift card has been depleted, you won’t be able to reload money onto the card or use it for another transaction.
Reloadable prepaid cards on the other hand can be loaded as many times as you want once the balance on the card has all been used up. You can also use reloadable prepaid cards for purchase transactions (online and through merchants) as well as ATM withdrawals. You won’t be able to do any of those with a gift card.
