Dec 14, 2011 — According to various studies and research reports, there are at least 30 million and potentially over 60 million consumers in the U.S. that are considered “un-banked” or “under-banked”. That is, these consumers do not have a substantial relationship with a traditional financial institution in the form of a checking or savings account. It probably comes as no surprise, given the state of our economy, that the number of these non-bank customers is estimated to be growing substantially. There are alternatives to traditional banking including – working for cash or using retail payday loan and check cashing centers to convert checks to cash. These can be very expensive and sometimes inconvenient, not to mention risky. Prepaid Debit Cards have become a preferred avenue for many of the un-banked, under-banked or even those that have a traditional bank relationship.
Here are a few reasons why:
- Safer than carrying cash – Obviously, it is more difficult for a mugger to spend on stolen plastic than the green stuff. Most cards also offer fraud protection.
- Identity protection – Why risk other bank or credit card info should a card be lost or stolen? Just load enough on a prepaid card to use for a specific purpose.
- Travel – The same risk issues above apply to a prepaid card specifically used for travel in case card is lost or stolen.
- No credit check – Pre-loaded money on the card is already yours. There is no credit involved with a REACH Visa prepaid debit card.
- Network brand recognition – Visa, Discover and American Express are recognized worldwide, as is the Western Union MoneyWise Prepaid MasterCard.
- Teen financial education – With online account management and budgeting tutorials with teen specific cards like BillMyParents, your teen can learn financial management.
- Bank distrust – Can you say, “Occupy Wall Street“?
- Credit card issues – Some of us just cannot control our spending with an open credit line and get into trouble quickly. You can only use what you load with a prepaid card.
- Religious – There are some faiths that restrict the accumulation of debt and interest by their congregations.
- Better budgeting – With technological industry advances, prepaid customers can monitor their accounts online and get text/email alerts to control spending.
There could be other factors consumers consider when scanning resources for a prepaid card, these are some of the most common. Take some time and compare each card to find out which one is right for you.