Introduction
In the current situation now, banks are pushing for the use of prepaid cash cards as people have been abusing the power of credit cards and ended up over spending by using the future money. banks will still earn a certain % of interest if you use a prepaid cash card in a store and it has less risk of having people who cannot pay up the bills as you will need to reload credit into the prepaid cash cards only then you are able to use it.
The first question I want to you all is : Should we use prepaid cash cards to buy things or credit cards? The second question is: What is the difference of using it and how does it affect us?
Prepaid Cash Card
Prepaid cash card provides convenience to consumers to make payments without using credit or using large amount of hard cash to purchase a certain product. Besides that, unlike credit cards, where you are encouraged and tempted to spend the future money, prepaid cash cards provide a better personal budget and is better at limiting a person's spending nature according to his or her current earning power, as a person is only allowed to spend funds already credited into the prepaid cash card and not spending money that could be repaid by instalments like credit cards, which is the reason why so many young people are running into huge debts now.Prepaid cash cards are designed to be used as a safer alternative as compare to cash.
How does a prepaid cash card work?
Firstly, Money can be credited into a prepaid card by cash at bank, post office, bank transfer or by even through employer.
After crediting enough money into the prepaid cash card, you can start buying products on the street as long as you have enough credit for the product. When you are purchasing a product, simply hand over the prepaid cash card to the cashier and you will be asked to key in your PIN number. The amount of the product will be deducted from you card.
Benefits
In the current situation now, banks are pushing for the use of prepaid cash cards as people have been abusing the power of credit cards and ended up over spending by using the future money. banks will still earn a certain % of interest if you use a prepaid cash card in a store and it has less risk of having people who cannot pay up the bills as you will need to reload credit into the prepaid cash cards only then you are able to use it.
The first question I want to you all is : Should we use prepaid cash cards to buy things or credit cards? The second question is: What is the difference of using it and how does it affect us?
Prepaid Cash Card
Prepaid cash card provides convenience to consumers to make payments without using credit or using large amount of hard cash to purchase a certain product. Besides that, unlike credit cards, where you are encouraged and tempted to spend the future money, prepaid cash cards provide a better personal budget and is better at limiting a person's spending nature according to his or her current earning power, as a person is only allowed to spend funds already credited into the prepaid cash card and not spending money that could be repaid by instalments like credit cards, which is the reason why so many young people are running into huge debts now.Prepaid cash cards are designed to be used as a safer alternative as compare to cash.
How does a prepaid cash card work?
Firstly, Money can be credited into a prepaid card by cash at bank, post office, bank transfer or by even through employer.
After crediting enough money into the prepaid cash card, you can start buying products on the street as long as you have enough credit for the product. When you are purchasing a product, simply hand over the prepaid cash card to the cashier and you will be asked to key in your PIN number. The amount of the product will be deducted from you card.
Benefits
- One can easily own a prepaid debit card as there is no need to worry about past financial history.
- It is safer to carry a prepaid debit card than to carry huge amount of money outside
- If debit card is stolen,you will at the most lose the amount of credit in the debit card.
- It also discourages overspending and curbs extravagant spending habit
Examples of prepaid cash card and its application:
Touch n go is one of the examples of prepaid cash cards. It is commonly used by road users on highways and also for major public transport for example LRT, KTM. Nowadays Touch n go can also be used to buy burgers at a certain location.It looks similar to credit cards and users have to reload in an amount of money ranging from RM20 to RM 500.
It is useful as it speeds up the low value but has higher transaction process type of products. People no longer have to look out for small changes during transactions.
Another example is the bankfreedom card.
This card allows you to make purchases and manage your money with ease. This Reloadable Bank Freedom MasterCard is guaranteed approved and is backed by MasterCard Zero Liability policy. So you are protected from any unauthorized purchases.
It also allows you to pay bills and reserve car rentals, hotels, motels, and airline tickets .
You can also transfer money to your family members should they run out of credit in their prepaid cash card.
PB Utar Debit Mastercard is another example of a prepaid cash card. You can withdraw money from any Mastercard ATM worldwide.
There is also special privillege like having a RM10 service fee waived if you withdraw from a Public Bank ATM.
Other than that, it is useful for parents to apply this card for their children who are studying in a university because this way, it can help curb the spending habits of their children.
Reference:
http://www.moneysupermarket.com/prepaidcards/prepaid-cards-guide2.asp
http://www.publicbank.com.my/en/en_content/personal/cards/master_utar.html
http://www.economywatch.com/debit-card/prepaid.html
http://www.galttech.com/research/finance/debit-card.php
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