In our dictionary, the term ‘plastic money’ refers to only debit cards and credit cards. However, most of us aren’t aware of another component of plastic money known as the prepaid card. Prepaid cards are the future trendsetters which help people spend without overspending or its other guilty strings. You can maintain a prepaid card to contribute towards one specific need, be it gifting your loved one on a specific occasion or carrying cash while on a journey abroad. The main advantage about prepaid cards is that they are difficult to scam owing to the fact that they are not associated to any bank account and further, you can load the desired amount of cash on it, as per your convenience and preference. These cards mostly fall under the categories of money cards, travel cards and gift cards, catering to the niche needs of users.
For instance, if you hold a travel card, a prepaid travel card will get your mind off the tension, that one normally associated with carrying wads of cash abroad. Traveler’s cheques are also subject to the risk of loss, theft or misplacement. In order to combat all these problems, prepaid travel cards were introduced. They are easy to use, store, and are a convenient option. You can also report immediately to the bank in case you have lost, misplaced, or had your card stolen, and a replacement will be delivered to you swiftly by the bank within a period of 2 days. You can use these cards while shopping at outlets abroad as well as to withdraw cash from an ATM, although this can be quite an expensive option owing to the high charges that can be levied on such a transaction. With fluctuating exchange rates becoming the norm of the day, you can also lock in currency exchange rates as you purchase your prepaid card. You get these cards in an array of currencies like Dirham, Pound, US Dollar and Euro. You can further reload the amount as and when you need it, depending on your travel requirements. The documents required in order to avail a travel card are your passport copies, visa copies, PAN card copies and a confirmation copy of your ticket. In case you are planning to visit other countries at the same time, then you have the freedom to buy multiple travel cards of various currencies, with add-on cards for additional use.
Prepaid cards in the form of gift cards are a great option too as it spares the trouble of hunting for an ideal gift. You can purchase gift cards from different banks, irrespective of whether you hold an account in such a bank or not. If you want to purchase a prepaid card with a balance of up to Rs. 5,000 or more, then you need to submit a copy of your identity proof to the bank, before purchasing your prepaid card. If the prepaid card far exceeds the balance of Rs. 5,000 then you also need to submit your Know Your Client or KYC documents to the bank too. Gift cards can be purchased in various denominations with a minimal issuance fee. The person who receives the gift card can use it any store of his choice, including online transactions. They can also check the balance of amount and other transactional information through the call centre or customer care of the bank. Some banks may also send mobile alerts through SMSs every time you have a transaction with your prepaid card. The disadvantage of prepaid gift cards if that they are non reloadable and you cannot withdraw cash from the ATM with it. If you have a gift card, try and use it quickly as some of these cards come with an expiry date.
Money cards are definitely in vogue in the financial world. They are mostly used by parents to give their kids the liberty of pocket money while limiting their expenditure. These cards can be used in stores while shopping as well as to withdraw money from ATMs. You can also load the card with any amount you want. But remember, they too are a form of debt, which can prove to be harmful for your financial stability if you fail to utilize them with prudence. Opting for loans like personal loans will be the only option to pay back your credit card dues. If you do not want to face such instances, spend wisely.