It is estimated that around 5% percent use a prepaid card at least once every month. A majority of these prepaid card users have used other financial products such as a credit card and a checking account. The average prepaid card user has a household income of about $30,000 yearly.
Reasons why people use prepaid debit cards
Most of the prepaid card users’ primary motivation for using these financial products is to gain control over their money. The reasons why the use these cards is to avoid overdrafts, avoid credit card debt, and to avoid spending more than their budget. Most of these debit card users use this financial product to shop at websites that accept card payments.
No more need for petty cash
If you own a store, restaurant, or any other business, there will be times when someone has to run out and buy something needed from the store. Having some petty cash used to be the best way to resolve this. However, having a prepaid card available for the employees to use for these small purchases can make things simpler for them. And if there are things that they have to buy that are cash-only, then it is an easy matter of withdrawing from an ATM using the card to do so.
Fewer fees involved
Instead of having to get a credit card for your business that involves a ton of paperwork and even more fees, getting a prepaid credit card for your employees to use can be much more affordable. This is because the fees involved in getting one or more of these types of cards are infinitely less than getting a credit card. Also, since it is prepaid, you won’t have to deal with having to pay for the monthly interest rates most credit cards charge.
Controlled spending
If you have employees that have to go out of town for business, then using a prepaid credit card can help them keep a handle on their spending. Since there is only a certain amount within the card that they can spend, you will be sure that they are keeping to their budget while they are away. Also, if there are any emergencies that need funds, you can easily transfer them the money they need right through their card.
Secure payment transactions
Another measure of security is added on to purchases made using prepaid debit cards because unlike credit cards, these cards require a pin before a transaction is made. Also, if your card happens to be with an employee who suddenly quits or is let go, there is no need to worry about disconnecting it. All you have to do is stop reloading the card for it to be rendered useless.
Using prepaid debit cards for business
Much like ordinary individuals, businesses also have the option of employing prepaid debit cards to use for their expenses. If you own your own business and are considering a way to keep track of your personnel expenditures, using the various card payment solutions do require a carefully studied decision.