Prepaid cards have revolutionized the way people choose to pay for their purchase on a day to day basis. As more and more people are opting to pay via their card instead of cash,prepaid cards come as a trace of spanking new experience to those who wants to avoid the distress of credit cards, and especially credit card debt.
Debit and credit cards , no doubt are still extremely popular as they offer aneasier and quicker ,alternative to carrying a stack of cash in wallet . However the biggest drawback is that people tends to overspend and finally landing themselves into a dodgy maelstrom of unnecessary debt before they comprehend it. And thus in such cases Prepaid card have come out to the best solution.
Prepaid Credit Cards are preloaded card with same convenience of use and acceptability as in a debit card or credit card.The handiness, ease of availability, assured approval and many other factors make them ideal substitute of credit cards. Also there is constantly the predefined limit and thepurchasesare done only up to the amount accessible in the prepaid card. Banks may charge aostensible issuance fee to issue a prepaid card.
How do Prepaid Credit Card Functions?
Prepaid credit cards are preloaded with money and work using a much-uncomplicated process. Unlike a regular credit card, which works on a borrowed credit from the issuing bank, customers can use the available funds on their prepaid card and can make a purchase accordingly. In the same line with gift cards, purchases in prepaid cards can be made tillthe balance is available on the card.
Basically a prepaid card looks the same as any other plastic card do such as they have a card number , magnetic strip, security chip and logo such as MasterCard or Maestro or Visa. Now a days most of the prepaid cards have either security EMV chip or are PIN enabled card keeping in mind the security of the card. Card holder have to load the limit prior using the card and henceforth can start using the card .Once the cash on the card is exhausted , one can’t spend any more till the time they have again uploaded some funds in the card.
Benefits of Prepaid Credit Cards
- The biggest benefit of prepaid credit cards is that card holder can make transactions without bring upon themselves any debts and hence paying huge interests on those debts. Spending would not go beyond the limit as customers can plan their everyday expenditure and pay for goods only contained by the card.
- Prepaid credit cards are quite easy to procure for those who are not looking for other type of credit card.Prepaid credit cards are available to everyone, irrespective of credit rating, salary or income, and whether or not they are holding any bank account. Credit score of a person is not a criterion to obtain a prepaid credit card.
- The procurement of prepaid cards is very simple and tranquil. One may either apply for a prepaid credit card online instantly. The maintenance is quite undemanding as there are no repayments or debt amount which has to bemade. Hence no late payment chargeor any other related penalties is to be worried about.
- As PIN code is required to use in most of the prepaid cards, it’s always a much secured way to carry money as a substitute of cash. In case of loss of card, the providers of the card have defined means to cancel or block the card and further arrange for the replacement of card.
- Unlike regular credit card, the cardholder can set their own spending limit in the prepaid credit card, not the card issuer. All the card holder needs to do is topup their card when they need to.
- The card holder can track usage and activity of prepaid card online or using phone. This one feature makes is extremely easy to monitor & control all the spending of the card holder.
- Prepaid cards are now widely acceptable in the same way credit card and debit cards are accepted .the card holder can also use them overseas. There are prepaid travel cards which are purposely geared for use overseas and hence are issued in specific currencies,
- Prepaid card are very handy alternative to a conventional bank account debit card when it comes to shopping or even using online. Prepaid credit cards take away the hassles of making cash dealings and can be used to transact in exchange for any goods or service with complete peace of mind.
- Prepaid cards such as open-looped cards can even be used to withdraw cash from atm by customers.
- Prepaid cards can also be utilized as a gift card as well as travel cards with currency loaded as wherein the individual is traveling abroad.
- A lot of prepaid credit card offers are available for the consumers such as cashback benefits or other reward points
Types of prepaid Credit Cards
There are different variants of prepaid credit cards in India which are being offered by most of the public and private sector banks and other financial institutions.
- Open looped Prepaid cards – Open looped prepaid cards are the most common types of prepaid credit cards available in Indian Market which is generally co-branded with the service provider such as MasterCard or Visa. In other terms it’s also referred as open system cards. Every open looped card carries the provider logo and is issued by banks or institutions in partnership with the provider. These cards are accepted at merchant outlets and other vendors which are duly approved banks.
- Closed Loop Prepaid Cards – Closed Loop card are such prepaid card which have limited acceptance and is restricted to the allied merchant outlet for purchase of goods or services at only those specific outlets. Gift cards are one example of closed loop cards.
- Semi-Open Looped Cards – an amalgam card, which is accepted by several merchant outlets or chains of such outlet, which are associated with the issuer of card. These cards are generally issued by shopping malls or retail chains and are accepted at locations partnering with these brands. Cards such as Big Bazaar card or pantaloon card are such semi looped prepaid credit card.
- Reloadable cards – While most of the prepaid credit cards in India come as reloadable cards, wherein the customer has to add funds, once the amount in the card isexhausted.
- Non-Reloadable cards –Such card which can be funded & used only once are non-reloadable cards .Gift cards generally fall under this type of card. Once the card holder uses the fund available in the prepaid card, reloading isn’t possible. Purchases can be done till the limit is available in these card.
Popular Prepaid Cards in India
State Bank of India proffers multiple variants of pre-filled cards in India customized as per the requisite of the applicant. The various types of cards presented by State Bank of India are
- State Bank Smart Payout Card,
- State Bank Achiever Card.
- State Bank Xpress Money Card
2. ICICI Bank
ICICI Bank offers such credit cards as per the requirement of the applicant. Various cards ranging from gift card or travel card or for corporate employers are available in ICICI bank. ICICI bank offers Pockets card, which is basically a digital wallet card which can be loaded through internet banking or a debit card. Pockets card are now a days a very popular prepaid credit cards which is widely accepted and can be used for DTH and mobiles recharge, sending gifts and money, bill payments, buying movie tickets etc.
Some of the other popular credit cards which are prepaid and issued by ICICI bank are
- Pay-Direct Card,
- Gift Card,
- Pockets/ Digital bank
- Meal Card,
- Saral Money Prepaid Card
- Indian Rupee Travel Card,
- The Reimbursement Card.
3. HDFC Bank
HDFC Bank, another major commercial bank in India offers multiple varieties of prepaid credit cards as per requirement of the customers. The HDFC Bank Forex-Plus is considered to be the best prepaid card, ideally suited for international travelers. This card can be availed either as a MasterCard or a Visa card variant. This card can be reloaded while the card holder intends to travels. Not only can this but Net Banking also be used by the card holders to track their card balance, spending pattern and other details The various brand of pre-filled credit cards issued by HDFC Bank are –
- Multicurrency Platinum Forex-Plus Chip Card,
- Forex-Plus Card,
- ISIC Student ID Forex-Plus Chip Card,
- Forex-Plus Platinum Card
- Forex-Plus Chip Card
- Food-Plus Card,
- Money-Plus Card,
- Gift-Plus Card,
- Apollo Medical Benefit Card.
- Hajj Umrah Card
4. Axis Bank
The Axis Bank Smart Pay Card is a handy tool for employers to pay employee salaries, incentives and other reimbursements to their employees. Smart Pay card makes sure that payouts takes place immediately and on a very safe platforms. The Axis Bank Smart Pay Card is a reloadable card wherein the funds can be loaded by the employer
5. YES Bank
YES Bank has multiple types of prepaid cards to offer as required by the applicant and purposes. The cards available in Yes bank rangefrom travel card, gift card and for corporate customers. The Incredible India Prepaid Travel Card is a customized prepaid credit card which can be used to for travel & flight bookings, utility bill payments, fuel transactions, shopping, etc. Customers can also go for different gift types of cards and purpose such asbuying jewellery, corporate gifts and other utilization. Yes Bank gift cards have the maximum upload limit of up to Rs. 50,000 and are accepted at any MasterCard outlet. Yes Bank also has Payroll cards for its corporate customers which is valid for five years. Companies can pay out salary and other perks through this card to their employees.
Some of the cards provided by YES Bank are –
- Multi-Currency Travel Card
- Gift Card
- Jewellery Gift Card
- Corporate Gift Card
- Payroll Card
- Incredible India Domestic Travel Card
6. Bank of Baroda
Bank of Baroda offers 2variety of prepaid credit cards that are available in India namely – Baroda Gift Card & Baroda TravelEasy Card.
The Baroda Gift Card is offered in partnership with Visa and is accepted at various Visa merchant outlets. The card comes with one year validity and can be used for both, over the counter purchase or online transactions in Rupees. The Baroda Gift Card utilizes the Visa Verified online platform for all e-commerce transactions and hence considered a very way for online purchases. However the card doesn’t have the feature of ATM withdrawals.
The other variant of prepaid card issued by bank of Baroda is Baroda TravelEasy Card which is an ideal variant of prepaid card for frequent travelers. It can be loaded in different currencies as per the requirement of the traveler such as USD, GBP, and Euros. The card has a validity of two years and can be uploaded with a minimum amount of USD 200 or equivalent amount.
7. American Express
The TAJ Gift Card offered by American Express can be used towards hotels reservation, dining services at any of Indian Hotel or the Ginger Hotels. However card holders cannot withdraw cash with this card. The card comes with a validity period of one year.