You often pay relatively large amounts with your Gold credit card, but you shouldn’t do without a card, especially when traveling abroad. You don’t necessarily have to use a credit card. In the following advisory we show the advantages and disadvantages of the prepaid card.
Cards pose a risk for you as the owner, because the limit stimulates over indebtedness. In the USA in particular, buying on credit is often the rule rather than the exception. But there is a variant: the prepaid card. It works in a similar way to a regular credit card, but has to be topped up with money before it can be used – usually by means of a transfer.
Prepaid cards make it almost impossible to get into debt and are therefore also suitable for your children. Minors, even from the age of six receive such cards only with the express consent of their parents. Your children can use the prepaid card on a school trip or at a camp abroad, for example, and treat themselves to something with it. The advantage: You cannot cause any damage with this payment.
Loss and Theft
If the prepaid card is lost or stolen, the total amount charged is lost. This sum can also be high, but then you should exercise caution. If you acted negligently, the bank will not help you either. If you can prove the opposite, the bank will usually reimburse you for the missing amount.
Access and Functions
When applying for a prepaid card, the banks do not ask about your creditworthiness or your possible entries. This makes these debit cards easier to get – even for those with debts or current credit, which means that they usually cannot apply for a regular card. Prepaid cards are also interesting for people without a fixed income, also because they do not have to go into debt.
The prepaid card also offers you many functions of the regular one: You can use it to pay at stationary companies such as shops, as well as in online marketplaces. You won’t notice any differences when withdrawing cash either. You may notice these, however, while on vacation.