Prepaid, Credit, Debit Cards: Which Is The Better Choice For You?


Nowadays, you have different choices when it comes to your options. Aside from paying in cash, you can now choose to pay using your prepaid card, debit card, or credit card. But for those who are not aware of the difference between these three, it can be confusing. So which is the best option for you? To fully understand and differentiate the best choice for you, then you need to learn each of these payment options.

All About Credit Cards

This is a thin slab of plastic that is issued by a financial company. This card can be used by the cardholders to borrow funds to pay for products and services. Credit card companies impose a condition that the borrower should pay back the borrowed money with its interest, as well as additional charges that were initially agreed upon.

Credit cards have higher APRs or annual percentage rates compared to other forms of loans. The interest of the unpaid balance needs to be taken cared of a month after the purchase was made. If the borrower is not able to pay for the unpaid balance plus the interests, it will greatly affect his or her credit history.

Understanding Debit Cards

Just like your credit card, the debit card is another payment card that will let you make secure, fast, and safe purchases whether online or in-store. But unlike the credit card, the debit card will draw the payment directly from your checking account. This means that you are not borrowing money from your bank. The money is already on your debit card and you own it. Once you open a checking account, you will get a debit card.

What Prepaid Cards Are All About

Unlike your debit card, the prepaid card is not linked to any bank account. This means that when you use your prepaid card, you are basically spending money that you have loaded onto your card. These cards are simply the plastic alternative to the cash that you carry around. What you do is load them with cash before you make your purchase. Vanilla Gift is one of the most trusted names when it comes to prepaid cards. What consumers do is check their vanilla visa balance first before they pay using their prepaid cards.

People Choose To Use Prepaid Cards, Here’s Why!

All three cards have similarities. You can use them to make purchases online or in-store. Each of them has its own advantages. For the credit cards, you can buy anything that you want as long as it is within the credit limit, even if you do not have the money yet. This means that you are borrowing money from your bank or credit union.

The debit cards, on the other hand, is a payment option that lets you use your own money from your checking account. This is a good choice if you want to use your own money and not borrow them, but you don’t want to carry around cash with you. And the prepaid cards are the most convenient for many people. You are using your own money like the debit card, but with a limit. This is because whatever amount you’ve topped up on your prepaid card is the only amount that you can use for your purchases. This is why prepaid cards are the most convenient and the easiest out of the three options.

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