What is a Prepaid Debit Card & How Do They Work?
A prepaid debit card is a card that looks like a credit card and is accepted everywhere a credit card is accepted, but has one major difference: a line of credit is not extended to the cardholder. In order to make purchases with a prepaid debit card, money needs to be placed on the card first. This money can come from a variety of sources. You can place the funds on the card yourself or a third party can add money to the card. A prepaid debit card makes it easier to keep track of ones spending. In addition, there is no risk of destroying a credit history that has yet to be created because you cannot spend more than what is placed on the prepaid credit card. Many of these cards also report to credit bureaus, which helps in building a positive credit history. Unfortunately, prepaid debit cards generally have many more fees than credit cards. In fact, there usually are no fees associated with credit cards. Debit cards, on the other hand, often have an application fee and an annual fee. Th
