Prepaid vs Debit Card: We know about credit and debit cards, but how many of us know about pre-paid cards? Generally, all commercial banks issue pre-paid cards.
But what is the difference between Pre-paid and Debit card? Money9 will give you every important information related to this, which you should know. These 9 things make the difference between a pre-paid card and a debit card
Pre-paid vs Debit
1. Pre-paid cards have pre-loaded cash, whereas debit cards are linked to the bank. Both cards can be used anywhere in the world.
2. Pre-paid cards are not linked, but any item can be purchased from them.
3. These cards do not help you in getting credit, but both prepaid cards and debit cards teach you how to spend money in different ways.
4. You buy a pre-paid card from any major bank as a gift card for a certain amount, but you do not get a debit card as a sale. It comes with a savings account.
5. No PIN or security code is required in the pre-paid card during any transaction. But a debit card requires a PIN.
6. Prepaid cards are generally used for making payments at Points of Sale or POS. Prepaid cards cannot be used at ATMs. But the debit card can be used in both the ways.
7. Prepaid cards have a fixed validity period. Like one year, two years. Once the validity is over, you cannot add money to the pre-paid card.
While debit cards also have an expiry date, after that the bank issues a new card. But when the validity of the card expires, none of your money is blocked.
8. After spending the money deposited in the pre-paid card, you can recharge it again or surrender it and return it.
Debit cards can be used as long as the cardholder maintains a minimum balance in his bank account with which he is linked.
9. If you have a history of spending, you can use a pre-paid card on debit and credit cards. But there is no such limit for debit card users, it depends on the amount in your bank account.
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