The Application of Pre-paid Cash Card for Consumers

Pre-paid cash card, also known as debit card is a card which provides alternative payment method to cash when making purchases. The funds are withdrawn direct from the bank account or the remaining balance of the card. It is different from credit card which do not deduct fund directly from bank account and having the bearer to pay back on a later date. However it is still not that common compared with credit card because most of the people do not have so much balances in their account while credit card allows users to make certain installments.
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Although not common, pre-paid cash card still have certain benefits like allowing users to withdraw cash instantly. It is also used widely for telephone and internet purchases. Basically there are 3 types of pre-paid cash card which are: Online Debit Card; Offline Debit Card; and Electronic Purse Card.
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Online debit cards require electronic authorization of every single transaction and the debits are reflected in the user’s account immediately. The transaction can also additionally protected by personal identification number (PIN). It is more secured compared to offline debit card.
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Offline debit cards are used at the point of sale like a credit card. It might subject to a daily limit which can be decided by the user. Transactions concluded with offline debit card might need 2 to 3 days to reflect in the user's accounting balances. One thing that offline debit cards are better than online debit cards is that there is no cost for the purchaser to bear. Unlike online debit cards, certain rates will be charged.
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Electronic Purse Card is a smart-card-based electronic purse system which the value is stored in a card chip. The machines accepting the cards need not to have network connectivity. The amount spent is deducted instantly from the remaining balance of the card chip.
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These are 2 examples of pre-paid cash card.
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Let us take a look at the benefits of pre-paid cash cards instead of credit cards. First, users can have better control of spending because it is pre-paid so we can only spend based on the budget we have got. Unlike credit cards, some people who cannot manage their spending properly might spend over-limit and they will be suffering when paying back because of the interest. Pre-paid cash cards are also better in the sense that they provide users the information about the account balances. Therefore when the balances are low, we will stop spending and there will never be problem such as over-limit.
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Although there are also limitations but pre-paid cash cards are good in managing our spending better than credit cards. Financial problems will be reduced since the card is considered debt-free. Anyway, the convenience and benefits of the cards are still based on the users themselves.
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