Before getting to know about the reloadable prepaid debit cards, let us first understand the concept of plastic money, or rather what is technically known as digital or electronic cash technology.
The revolution of computers and Internet was highly instrumental in speeding up the process of banking and transactions. The digital cash technology that makes the use of electronics, computers and databases for its operation, has now started replacing conventional paper money and coins with the reloadable prepaid debit card.
What is a Debit Card?
Now before we understand the concept of reloadable prepaid debit card, here is a short paragraph about the meaning and working of debit cards. If you already know what the debit card is and how it works, proceed to the next paragraph about reloadable prepaid debit card.
In case of a credit card, we swipe the card and the credit card company bears the expenditure at the time. We then reimburse it when the monthly bill comes. The company charges us a fee or an interest for bearing our expenditure. The same principle is applied in the case of debit cards. The only difference in this case is that the users of the card have a to pay the amount first to the company and then spend it.
For example: I use a debit card that I got from the free prepaid debit cards scheme that my bank had provided. Before I spend anything, I first have to pay my bank a certain sum, say a $100 and then only can I spend the amount by swiping the card.
Due to this type of working, commercial debit cards are popularly also known as stored value cards. This kind of facility is sometimes also given by banks, where the amount that you have swiped simply gets deducted from your bank account balance.
Let us now proceed to the concept of reloadable prepaid debit card.
What is a Reloadable Prepaid Debit Card?
There is no significant difference between the normal debit card and the reloadable prepaid debit card. The reloadable prepaid debit card, is to be periodically updated with cash. Hence the term, reloadable prepaid debit card. Some companies have also started the same service for recurring and specified expenses.
An example that is fast coming into vogue, is that of the petro card, which is a reloadable prepaid debit card that can be used for filling gas at almost all gas stations. The same companies and organizations providing the best prepaid debit cards, have started providing international tourists, frequent fliers and businessmen with a reloadable prepaid debit card.
These can be swiped at almost all the airports irrespective of the currency exchange rate. These cards are also known as universal prepaid debit cards. Some of the other such innovative ideas, such as prepaid debit gift cards, free prepaid debit cards etc. have also been put into use. Many banks have started facilities where one can buy prepaid debit cards online, without going to the bank itself.
There are several advantages and disadvantages of reloadable prepaid debit cards. But the fact that the concept is revolutionizing the modes and methods of payment, cannot be disputed. One of the best advantage of the reloadable prepaid debit cards is that the modes of payments are being standardized and are taking a more uniform guise.