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:
Issuance of Credit. As prepaid cards are a means of using one's own money, no credit is issued with the use of this card. You can simply load your money and use it via a co-branded prepaid card, all over the world. On the other hand, although debit cards allow bank customer to withdraw amounts from their own accounts, there may be an overdraft facility provided by some banks.
Cardholder Eligibility in Terms of a Credit Check. It seems that banks issuing prepaid cards do not make their customers suffer much. There is absolutely no credit check. When it comes to debit cards, on the other hand, they would go for one to certify that their account holder does in fact have the right credit score and rating.
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.
Customer Information. The issuance of a debit card requires the complete background details and information, regarding the bank customer. On the other hand, prepaid cards can easily be issued with very little and basic information about the customer.
Using ATMs. Not all of the prepaid cards empower a bank customer to be able to withdraw their money through an ATM whereas debit cards do facilitate their users with this benefit.
Overall, debit and prepaid cards both have their differences but are similar in their usage and cancellation policy. This means that both cards can be used anywhere in the world, depending upon the logos that are present on them. Both of these cards can also be cancelled with ease if lost or stolen.
Issuance of Credit. As prepaid cards are a means of using one's own money, no credit is issued with the use of this card. You can simply load your money and use it via a co-branded prepaid card, all over the world. On the other hand, although debit cards allow bank customer to withdraw amounts from their own accounts, there may be an overdraft facility provided by some banks.
Cardholder Eligibility in Terms of a Credit Check. It seems that banks issuing prepaid cards do not make their customers suffer much. There is absolutely no credit check. When it comes to debit cards, on the other hand, they would go for one to certify that their account holder does in fact have the right credit score and rating.
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.
Customer Information. The issuance of a debit card requires the complete background details and information, regarding the bank customer. On the other hand, prepaid cards can easily be issued with very little and basic information about the customer.
Using ATMs. Not all of the prepaid cards empower a bank customer to be able to withdraw their money through an ATM whereas debit cards do facilitate their users with this benefit.
Overall, debit and prepaid cards both have their differences but are similar in their usage and cancellation policy. This means that both cards can be used anywhere in the world, depending upon the logos that are present on them. Both of these cards can also be cancelled with ease if lost or stolen.
About the Author:
Debit cards are a good option for those individuals 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 selection today in accordance to your needs!
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