Nowadays, customers can choose from various payments options. Of all the credit cards and other plastic money available, debit and co-branded prepaid cards have some similarities between them. Card users get confused between these two cards and have a difficult time making a choice. If you are facing the same problem, read on to find out about how to select between the two:
Issuance of Credit. As prepaid cards are a means of using one's own money, no credit is issued with the use of this card. You can simply load your money and use it via a co-branded prepaid card, all over the world. On the other hand, although debit cards allow bank customer to withdraw amounts from their own accounts, there may be an overdraft facility provided by some banks.
Is There A Credit Check? Customers are not charged with any credit check before the issuance of prepaid cards. However, credit checks are performed by the banks for debit cards to verify customer's credit score and ratings before they issue them.
Card Fee. One of the best things about prepaid credit cards (especially the co-brand prepaid cards) is that they require only a minimum maintenance or opening premium while debit cards cater to a relatively different scenario. Their fee is in accordance with the bank account and will also include the costs of penalty for having overdrafts long overdue.
Card Charges. Prepaid credit cards are often charged with a small opening fees or maintenance charges, especially in cases of co-branded prepaid cards. On the other hand, debit cards with be charged with any fees applicable to the bank account, as well as any penalty fees applied to overdrafts that have become overdue.
Do They Require Customer Information? Complete background information of the customer is required in order to issue a debit card. However, in case of prepaid cards, merely a few basic details are needed from the customer.
Can These be Used at ATMs? At the ATMs, a debit card can be used but a prepaid card can't. There are really few prepaid cards that provide users the facility to withdraw cash from an ATM.
Overall, debit and prepaid cards both have their differences but are similar in their usage and cancellation policy. This means that both cards can be used anywhere in the world, depending upon the logos that are present on them. Both of these cards can also be cancelled with ease if lost or stolen.
Issuance of Credit. As prepaid cards are a means of using one's own money, no credit is issued with the use of this card. You can simply load your money and use it via a co-branded prepaid card, all over the world. On the other hand, although debit cards allow bank customer to withdraw amounts from their own accounts, there may be an overdraft facility provided by some banks.
Is There A Credit Check? Customers are not charged with any credit check before the issuance of prepaid cards. However, credit checks are performed by the banks for debit cards to verify customer's credit score and ratings before they issue them.
Card Fee. One of the best things about prepaid credit cards (especially the co-brand prepaid cards) is that they require only a minimum maintenance or opening premium while debit cards cater to a relatively different scenario. Their fee is in accordance with the bank account and will also include the costs of penalty for having overdrafts long overdue.
Card Charges. Prepaid credit cards are often charged with a small opening fees or maintenance charges, especially in cases of co-branded prepaid cards. On the other hand, debit cards with be charged with any fees applicable to the bank account, as well as any penalty fees applied to overdrafts that have become overdue.
Do They Require Customer Information? Complete background information of the customer is required in order to issue a debit card. However, in case of prepaid cards, merely a few basic details are needed from the customer.
Can These be Used at ATMs? At the ATMs, a debit card can be used but a prepaid card can't. There are really few prepaid cards that provide users the facility to withdraw cash from an ATM.
Overall, debit and prepaid cards both have their differences but are similar in their usage and cancellation policy. This means that both cards can be used anywhere in the world, depending upon the logos that are present on them. Both of these cards can also be cancelled with ease if lost or stolen.
About the Author:
Debit cards are a good option for those customers who already have bank accounts and will not be tempted to exceed their expenditure limits. However, for teenagers who do not have bank accounts and will be tempted to take credit, co-branded prepaid cards are the right option. So make the right decision today in accordance to your needs!
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