What is a Prepaid Debit Card?
Prepaid debit cards are plastic cards that allow you to access an account where you can deposit your money. Don’t let the term “prepaid” fool you. These debit cards access normal bank accounts. “Prepaid” simply means that you can only access funds in your account if you have money in the account (you can’t use them like a credit card to access a line of credit). Many people consider prepaid cards to be better than normal bank accounts, because of the wide range of features prepaid debit cards offer. Even better, most prepaid debit card banks allow you to open a prepaid debit card account even if you have terrible credit or are on the ChexSystems bank list.
Unlike a credit card, which extends a line of credit, prepaid cards are more similar to debit cards, or ATM cards. Prepaid debit card holders can only spend as much money as they have deposited on the card. Since no credit is extended to prepaid card holders, interest and overdraft fees are avoided.
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