subject: Prepaid-Cards: Credit versus Debit [print this page] Prepaid-Cards: Credit versus Debit Prepaid-Cards: Credit versus Debit
Prepaid cards are cards that you put your own money into so you can spend it at a later time, much like a gift certificate. The only difference is that the money comes from you. Prepaid cards are therefore just like spending cash, only they are safer to use. They do not attract unnecessary attention, and if your money gets lost or stolen, you can get it back, much like you would on a regular debit or credit card. Prepaid cards come in two main types: Credit or debit.
Prepaid debit cards and prepaid credit cards work about the same, except that with some types of prepaid credit cards, you can have the option of building up your credit at the same time. Many times, however, building up your credit on a prepaid credit card is an added feature that you must pay for as a service. If you used a regular credit card, you would not have to pay to be able to build up your credit as you used it, but you would also run the risk of going into debt as well. With a prepaid card, you will never go into debt as long as you use the card.
Prepaid credit cards and prepaid debit cards are used the same way when you pay for things. For both types of cards, you swipe your card and select the credit option. If you are using a prepaid debit card, you will not have to put in a pin number since your card will not be associated with a pin, That is why you select credit. Think of it as credit from yourself and not from a credit card company. When you return things and need to put money back into your card, it is the same procedure as you would do with a regular credit card.
