When we think of cards, the first thought that comes to our mind is either a credit card or a debit card. What most of us are unaware of is that there is another category of useful cards which can be loaded and used as and when required - these are the prepaid credit cards.
What is a Prepaid Credit Card?
A prepaid credit card allows you to make any purchases with plastic money, just like you would with a regular credit card. All you have to do is “load” an amount of your choice into the card and you can use it at any MasterCard or Visa affiliated establishment.
There are different kinds of prepaid cards that you can choose from after assessing which one suits your requirement the best. some of them are Cash Cards, Gift Cards, cards that are really beneficial if you love shopping online and some that are purely entertainment oriented. Each card has features and benefits of their own and are very handy in terms of curbing your spending limit, thereby ensuring larger savings for you in the long run.
Prepaid Cash Cards enable you to load the card with an amount for your choice to hand it over to another to make purchases for you. For example, you can give it to your household help to buy groceries or your driver to fill fuel in your vehicle. You can also manage money well by giving this to your teenager for them to buy what they require. It will keep your spends in check and also ensure you are only spending well within a budget.
Prepaid Gift Cards are those that can be loaded with a particular amount and given to a loved one to indulge in whatever they want to. They can shop, dine and relax in any place of their choice that accept these cards.
Entertainment oriented prepaid cards are the most interesting amongst all others. With this card, you get offers that you can redeem every time you go for a movie, or shop or spend time with your friends. Not just that, you can take a card together with your friends and have the offer multiplied manifold as well.
The validity of these cards usually range from about 1 to 2 years and on very rare occasions you may be asked to pay a one-time fee on the card.
What is the difference between credit card and prepaid credit card?
The only difference here is that one needs to “load” the card with money before using it. Unlike conventional credit cards where you first spend and then repay based on the bill that you receive from the bank, here you have to have money in the card before you actually spend it.
You can think of a prepaid credit card as a prepaid telecom offer given by telecom service providers. A credit card would be equivalent to a postpaid offer where you later pay the bill.
Features and Benefits of Prepaid Cards
The concept of prepaid cards are new and the first of its kind reloadable MasterCards in the Philippines that allows you to shop easily and securely in all MasterCard and Visa affiliates online as well as all over the world.
Below are some of the numerous features and benefits of prepaid cards in the Philippines:
- Prepaid cards can be used in all MasterCard and Visa affiliated gas stations, supermarkets, groceries, shopping sites and department stores in the country. It can also be used to dine in places of your choice and relax in places which interest you the most.
- You can monitor your spends by viewing the record of your transactions on a regular basis.
- Prepaid cards are very easy to reload. You can use different channels that are available by each bank to transfer funds from your Savings Account to your prepaid card. It can be through ATMs, over-the-counter or even transferring money with just one click from your savings account to your prepaid card.
- You can also withdraw money from all the bank’s ATMs in the country. Some banks allow you to avail this facility for free, whereas some charge a nominal fee on the same.
- The user of the prepaid card can use the card multiple times for any number of transactions till the balance of the card reaches zero. If the balance is zero or there is insufficient balance while making a purchase, the transaction gets cancelled.
- Most times, you don’t have to maintain a minimum balance in the account.
- 100% guarantee on the approval of the application request for a prepaid card.
- The validity of the card varies from bank to bank, and is usually seen to be between 12 to 24 months.
- There is no upper limit to which you can load money into the prepaid card. You can put in any amount of money that you wish to.
Who can avail this card?
Anyone in the Philippines can avail this card. You can use this card even if you are 12 years of age. Online shopping is on the rise and teenagers can now get what they want online by using this prepaid card. It's so easy and hassle-free and also you spend only within a particular limit, i.e. the amount that has been loaded in the card.
How prepaid credit card works?
Essentially, a prepaid card is a device to store any monetary value. An amount of your choice can be loaded into this card through any available means. Some of the means by which you can load money into this card is through depositing it in a bank branch or at any ATMs of the bank in the country. There is no upper limit to the amount that you can load into your prepaid card account. You can load as much as you’d want to.
Once the amount is loaded into the prepaid card account, the cardholder can make any purchases using the card. The way the transaction takes place using a prepaid card is the same way that a credit card functions. All you have to do is swipe at counters or establishments that are Visa or MasterCard affiliates, insert your card into the same terminal and make the transaction just the way you would with any regular credit card.
The main difference here is that when the transaction is taking place for the purchase, the value of the purchase is deducted directly from the amount that has been loaded and stored in the card. The card can be swiped any number of times till the balance in the card reaches zero. Once the balance in the card has reached a zero mark, or is insufficient to carry out the purchase transaction, the transaction taking place automatically fails.
Apart from this, you can also use your prepaid card to to withdraw the money you have already pre-loaded into the card earlier. This will cost you a fee of Php50 and is a facility that can be used only over-the-counter at the bank branch. It is also worth remembering that if we want to withdraw some amount from our prepaid card, a Personal Identification Number is required. Usually, this PIN is sent to the card holder by mail within a few weeks after the registration for the request to withdraw the money.
How do you get a Prepaid card?
The concept of Prepaid cards are relatively new in the Philippines. To avail one, one can walk into a bank that offers these and and get more details on the different prepaid cards available. You can also check online for the banks that offer these cards and which one would suit you the best.
Best Practices on Keeping Track of spend on your Prepaid Card
Always ensure that you keep track of your spends with statements that show all purchases made and the corresponding amount paid for each of them. Keep track just the way you would do for your credit card.
You must also make sure that you are well aware of the fees and charges that you have paid. Get a statement for the same, either online or by mail on a regularly, preferably on a monthly basis. Some banks charge a nominal amount for the statement but there are others who provide the same for free as well.
Load money into this card as wisely as you’d spend and be ensured to save a lot more than you’d otherwise do.
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