As banks add more fees, and as it becomes difficult for some consumers to obtain accounts at some of the big banks, prepaid debit cards are becoming popular.
Prepaid debt cards look a lot like “regular” debit and credit cards, sporting the logos of major payment processors like Visa, MasterCard, and American Express. You can use them anywhere major credit cards are accepted, so it makes them convenient.
However, no matter how much like a credit card a prepaid debit card is, it’s important to understand the difference.
Credit Card vs. Prepaid Debit Card
With a credit card, you are borrowing money up to a certain limit. You use the money first, and then repay it later. Additionally, if you carry a balance, you end up paying interest on that balance.
A prepaid debit card functions differently.