Prepaid cards are becoming a popular go-to for people who want an alternative to traditional credit cards, especially if they’re trying to avoid accumulating more debt.
For those struggling with heavy debt but still needing a way to make purchases, prepaid cards offer a useful solution. These cards work by loading them with a set amount of cash, and you can use them almost anywhere that accepts Visa or MasterCard. The great thing about prepaid cards is that you can reload them as needed. Once you make a purchase, the amount is deducted immediately, and you can keep using the card until the balance hits zero.
With the growing demand for prepaid cards, there’s now a wide variety to choose from. So, how do you find the best one for you? One tip is to look for a card with a one-time fee. While this fee might be a little higher upfront compared to others, these cards often come with perks that can save you money in the long run. For example, they may offer free reloads, no transaction fees, longer expiration periods, and free customer service. You also get useful online features, like balance checking. It’s also a good idea to go with a well-known card provider rather than a new or lesser-known option.
Different prepaid cards come with different fees, which can vary widely. Some cards have low initial fees, like $2, but might charge you for almost everything afterward, including transactions and reloading the card. Another thing to watch out for is cards with expiring balances, where the remaining money on the card can disappear after a certain period if it goes unused.
When you’re shopping around for a prepaid card, make sure you carefully read the fine print. Some of the important details might be buried, and you’ll want to fully understand what fees and conditions are attached to the card before making your choice.
While these cards do come with fees, the good news is you don’t have to worry about racking up interest like with a traditional credit card. The main goal of using a prepaid card is to avoid any negative impact on your credit score. These cards also offer their own set of advantages. For instance, if you opt for a card that can’t be reloaded, you can enjoy a level of anonymity since it doesn’t require ID or an application process. Plus, prepaid cards provide added security when making online purchases.
According to Anne Koski, head of card innovations at RBC, the potential market for prepaid cards in Canada could be worth over $100 billion. A more conservative estimate puts the figure somewhere between $35 billion and $50 billion.
As more Canadians adopt prepaid cards, companies are racing to offer new options packed with features and benefits. Expect to see even more exciting developments in the prepaid card space as the competition heats up!
