Probably one of the major conveniences of debit cards is that they can be used just about anywhere that displays the card brand acceptance mark. So, for example, that could be when making online or telephone purchases or in shops, petrol stations, restaurants and some ATMs etc. However, depending on how a debit card is set up, there may be the chance of over spending on them. If you have an automatic overdraft facility on the bank account associated with your debit card, you could find yourself overspending and running up debt (which may typically attract interest charges if not repaid immediately).
One way that you may still have the convenience of plastic but without the risk of running up debt may be via using a prepaid debit card – also simply known as a prepaid card.
Prepaid debit cards
Prepaid cards are ones which you "load up" with credit before spending them. Depending on whom your card provider is, the way that you can top up your prepaid card may include some or all of the following:
– with cash at PayPoint terminals (often found in newsagents and convenience stores)
– top them up online via your bank account
– get your boss to pay your wages on to it
Depending on your needs and circumstances, prepaid cards may sometimes have a number of advantages over other plastic, such as debit cards and credit cards, including:
– There are no credit checks with prepaid cards. As the prepaid card provider is not actually lending you any money, there is usually no need to assess your financial situation. This may make them accessible to people who have had debt problems, and also to teenagers who are looking for a safer alternative to carrying cash. Although card providers will do an electronic identification check, generally there are none of the delays (or worries) that may be associated with credit check.
– There are no late or interest fees in relation to the use of the card (though there may be charges per the issue of the card or when you top it up or use it – this will depend on your pre pay card provider).
– There is no temptation to get carried away. Unlike a credit card, prepaid debit cards will not allow you to spend what you haven't got.
Instant access to cash
Prepaid MasterCards can be used at ATMs bearing the MasterCard acceptance mark, so you can have immediate access to your money (up to the provider's daily set cash limit amounts). PIN protected, the cards must be reported if they are stolen so that they can be cancelled. This way, the remaining funds left in your account can be secured.
Access to foreign funds
Many prepaid debit cards will permit access to your money abroad, so you can get cash out in the local currency of the place you are staying in. This means that you only take out as much as you want to spend that day, so there is never the hassle of trying to change back foreign money that you no longer need at the end of your holiday. Having a card that can be used abroad also means that there is no rushing around trying to find a bureau de change in an emergency.