Prepaid Cards Types and Differences

Did you know that the number of card transactions increased rapidly up to 7% in just a year?

Whether you call it pandemic or the rising trust on online shopping, it is unarguably a spectacular increase.

 

Although it is impossible to say the total number of debit cards in circulation which can not be calculated due to debit card brands overlapping in one card, we can simply conclude that cash payments are slowly taking their places in the dusty shelves of history. Frankly, it was inevitable. Since, today, there are no borders on the internet and globalization touches our lives in various aspects, everyone chooses the most conventional option to purchase services and items.

We are sure that everyone hesitates for a second before inserting the card details to a website. Because technically, you give your financial information to an unknown party. At this very point, prepaid cards step forward and eases the whole process. To clear the clouds we need to understand what a prepaid card is exactly.

 

Simply, we can define a prepaid card as a “pay-as-you-go” card. Once you load money onto it, you can spend it in the way you like. Being not linked to a bank account or to a credit union share draft account, prepaid cards enable you to spend money you placed in the prepaid card account in advance with no question marks of security in your head. You may ask yourself why you need a prepaid card instead of a debit card you already have. Let us explain.

 

Unlike prepaid cards, debit cards (settlement or payroll cards) are linked to a cardholder’s account in a bank. They may come with benefits, usability internationally and multiple spending options but everytime you withdraw money from an ATM or after a purchase that exceeds the amount, you need to pay a fee. A bank account holder is also obligated to pay additional expenses, monthly and annual fees for card services. Besides, the biggest issue about debit cards is that debit card owners are always at risk of fraud due to lower protection and cyber attacks.

 

Have you ever noticed the array of gift cards for purchase and prepaid cards for sale when you are waiting to check out in a supermarket? In a perspective, being issued by financial institutions such as Visa, MasterCard, and Discover, they are a type of debit card. You can easily pay your bills and use ATMs to withdraw cash. You may ask yourself why you must pay extra fees for the same services with your traditional debit card linked to a bank account. And do not forget the challenging effort and paperwork you must pass through to create an account in an actual bank. These are the main reasons for the tremendous demand for prepaid cards today.

 

We can simply categorize prepaid cards types in five forms and these are:

 

General-Purpose Reloadable Prepaid Cards

In other words, “opened-loop prepaid cards” carry a provider logo like MasterCard and Visa. You can utilize them at all stores accepting these two providers. They are a seamless option for those who can’t provide proof of address or have a poor credit score in the current system. They are also attached to an online banking system where you can easily operate your money online.

 

Prepaid Gift Cards

This type of prepaid card distinguishes itself from others due to the fact that it cannot be reloaded when the amount has been spent and a gift card will not provide banking facilities. Generally, they will be a “closed loop card” meaning holders may only spend them in specific stores, affiliate retailers or partners.

 

Retail Prepaid Cards

Despite a gift card, a retailer card can be used in specified supermarkets, petrol suppliers, airlines or stores partnered with a banking provider or card network. These cards serve a great opportunity for rewards points, discounts or additional services in these establishments.

 

Prepaid Travel Cards

Afraid of unpleasant incidents during your travels abroad? These types of prepaid cards

can be used in shops and in ATMs, just like a regular debit card. Thus you will not worry about carrying around high quantities of cash with safety apprehensions.

 

Payroll Cards

These are the cards given to employees by their employer. They are mainly used for the workers who may not be able to open a bank account and want to build their financial health.

 

Jeton provides you a spectacular prepaid card, JetonCash. You can use our card safely and effectively worldwide. Furthermore, when you create a Jeton account, you will be served a seamless online banking service smoothing the way to operate your assets.

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