Things To Consider When Choosing A Prepaid Card Provider

prepaid cards

Recently, prepaid cards have become popular in the financial market. Similar to how you use typical credit cards responsibly to build your credit, prepaid cards can also help you become more financially responsible.

Since they’re known as reloadable cards, they have occupied a place in many people’s wallets. Typically, prepaid cards work similar to bank debit cards, but the only difference is that there’s no checking account linked to the card. Instead, the user will load money onto the card before it can be used. 

Despite the convenience prepaid cards offer to users like you, it’s still important to choose a trustworthy prepaid card provider you can work with. While there are several providers in the market, not all of them offer services that will suit your requirements. 

If you’re looking for a prepaid card provider now, below are the things to consider from the get-go: 

Prepaid Business Licenses 

Like other financial institutions, your chosen prepaid card provider should also have the authority to provide financial services to clients like you. Before you work with anyone, be sure to check the provider’s license to ensure they are a reputable company and can be trusted. 

Ideally, licenses and other relevant documents are important because they can help you determine the provider’s reputation. And since using prepaid cards involves your money, you need to ensure the prepaid card provider is trustworthy and stable by looking at their license. 

Prepaid Card Fees 

prepaid card fees

Another vital factor to consider when selecting a prepaid card provider is the fees they charge. Looking into this is important because fees differ from one provider to another. Don’t waste money on hefty fees if you can avoid it. Take a quick glance at the fee scheduled to make sure you get the biggest bang for your buck.

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    To help you, the following are the typical fees to compare when taking a prepaid card:

    • Activation Fees – These fees are paid when you activate and use the card for the first time. 
    • Reloading Fees – These are the fees you’re going to pay every time you add funds to your prepaid card. 
    • Service Maintenance Fees – These are the fees being paid to the provider for your prepaid card’s service maintenance. 
    • Purchase Transaction Fees – These are smaller fees charged for each purchase transaction you make. 
    • Declined Transaction Fees – These are fees charged to your account when you try to make a purchase, but you have no sufficient balance, and the transaction was declined. 
    • ATM Withdrawal Fees – These are fees charged for withdrawing money from out-of-network ATMs. 
    • Fund Transfer Fees – These are fees to pay when you transfer money to another cardholder. 
    • Paper Statement Fees – These are fees charged to your account when the provider sends you a paper statement. 
    • Inactivity Fees – These are fees to pay when you haven’t used your prepaid card for a certain period of time, usually three months or longer. 

    As you can see, there are several fees to consider when using a prepaid card. Depending on the provider you choose, you may end up paying more money for the fees or the other way around.

    But if you want to stay on budget, be sure to pick a provider that charges reasonable fees. That way, you can get the most out of your card’s features without spending too much on the fees. 

    Prepaid Card Essential Features

    Aside from the fees, it’s also essential to factor in features when choosing a prepaid card provider. The features they offer will determine whether they’re the right provider for your need.

    Below are the vital elements to look into when considering a prepaid card company:

    • Mobile App – In today’s digital world, it’s a good idea to choose a provider that offers a mobile app for your transactions. With a mobile application in place, you’re able to manage your money digitally by paying bills online, reloading money online, and staying on top of your balance. 
    • Sub-Accounts – Some prepaid card providers offer sub-accounts. If you want to stick to your budget, you can deal with providers that provide sub-accounts, where you can share your account with your spouse, children, or partner. 
    • Savings Feature – If you want to build your savings, you can choose a provider that offers a savings feature. These are common among credit unions and large banking institutions. 
    • Rewards And Perks – Just like the high limit card features and rewards of a usual credit card, some prepaid card providers offer rewards or perks such as free road assistance. If you want to get the most out of these extras, always choose a provider with bonuses and perks. 

    Prepaid Card Consumer Protections

    Generally speaking, there are no federal state laws or regulations that protect prepaid card users from fraud and other related problems. However, the prepaid card provider you choose may implement some guidelines about consumer protections.

    For the most protection, always look for a provider that imposes the following policies intended to protect consumers:

    • Easy, free online access or sending of monthly statements regarding the account balance and history. 
    • Insurance protection against loss of your balance which is caused by the provider’s failure to hold the account’s funds. 
    • A dispute resolution method that allows your provider to investigate errors and other problems you report. 
    • Security features and tools that protect you from any fraudulent activity. These can include encryption and tokenization methods and an EMV (Europay, Mastercard, Visa) chip card. 

    Prepaid Card Customer Support 

    During your use of the prepaid card, there will be times when you need customer assistance with your account. When you’re choosing a prepaid card provider, always factor in the level of customer support.

    Be sure you’re dealing with a company that offers round the clock customer support service. This guarantees you can talk to a representative in the fastest time possible to assist you with your concerns. 

    The Bottom Line

    Given the increasing popularity of prepaid cards for various purposes, knowing who issued the card is important. Luckily, keeping the things mentioned above in mind while looking for a prepaid card provider can help you choose the right company for your prepaid card needs.