Platinum Author
Prepaid debit cards are sometimes called cash cards and more confusingly, prepaid credit cards.
In reality, they are an entirely different financial facility to either bank debit cards or credit cards.
How prepaid debit cards work
In terms of use, they work exactly the same as any plastic card.
Typically, you simply use them at any ATM, ticket machine or retail asset that carries the card's brand (eg. MasterCard).
You can even use the card to pay for internet transactions.
Yet how they word behind the scenes is very different.
Credit cards and bank debit cards
Credit cards, when you use them, check the credit balance of your permanently available loan (the credit limit). If there is credit to spend, your transaction will be approved and your debt increased.
The bank debit card performs exactly the same process but this time it checks the transaction amount against the amount in your bank account. If you have money in your account, the transaction will be approved.
However, some banks apply what's called a shadow limit, in other words they will approve a level of transaction even if it takes you into an unauthorised overdraft position - something that may cost you significant amounts of bank fees.
The prepaid card
By contrast, prepaid cars cannot be used to spend more that you have previously loaded onto them.
That may make them an ideal tool for ensuring that you don't spend more than you know you can afford.
For example, you may load money onto a prepaid card then give it to your children if they're going around town. They don't have the risk of carrying cash around and you don't have the risk of them having unrestricted access to your main bank account.
These cards are fully PIN protected and even if they were stolen and somehow used, you couldn't lose more than the maximum amount you'd loaded onto them in the first place.
Useful for holidays
They may also prove useful if you don't like the thought of carrying lots of cash around with you abroad.
Just load the money onto your card and it's secure.
Prepaid debit cards can typically be used overseas anywhere where you see the card's brand logo displayed.
About this Author
Gary Miller-Cheevers is the CEO of Speed-e-card.com, a UK based prepaid debit card provider. The Speed-e-card is like a normal credit or debit card, but with no late fee or interest charges. It is unique in that a speed-e-loans payday loan can be loaded onto the card, once it is activated. Customers also get a free e-bank account, so can use the card as they would a bank account, having their salary loaded on to it and managing bills online. So if you are looking for a prepaid debit card, please visit us.
Article Source: http://EzineArticles.com/?expert=Gary_Miller-Cheevers
