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Pyypl Team
Sep 5
/
4 minutes

Prepaid Payment Cards vs Traditional Banking - Which is Better?

Prepaid Payment Cards vs Traditional Banking - Which is Better?
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Summary

If you've ever tried to open a bank account, you know it can be difficult. Even after jumping through all the hoops and passing all the document checks, you'll still pay fees for everything from checking your balance to making a deposit.

Choosing the right financial provider can be tricky, with countless factors to consider. From account fees to interest rates, to the level of customer service provided, the decision-making process can be overwhelming. You want to make sure that you're getting the best deal for your money, but how do you know which one is right for you?

In this blog post, we’ll explore prepaid cards and compare them to traditional banking options, so you can confidently navigate the terrain and make a choice that best suits your needs.  

What is a Prepaid Payment Card?

A prepaid card is a type of payment card that enables the cardholder to store funds in a pre-loaded account. The funds can then be used for purchases at merchants or withdrawn as cash at ATMs. Unlike credit cards, however, there are no interest charges associated with these transactions.

One example is the Pyypl prepaid card, which is a virtual prepaid MasterCard that can be set up in under 2 minutes via the Pyypl app, with no paperwork requirements. Since it works like regular bank accounts but doesn't require a long list of documents, the Pyypl card makes it easier than ever before for people who may have struggled with traditional banking services to access financial products that would be otherwise out of reach due to credit history or a lack of documentation.

What is a Traditional Bank Account?

A traditional bank account is any deposit or payment account held by an individual with a regulated financial institution, such as a commercial bank, credit union or savings and loan association. It can be used to make payments and withdrawals from your own funds, transfer funds between accounts, make payments online, and deposit checks and other documents into your account. You normally need a salary certificate for bank account opening in most countries around the world.

Using your card, you can use ATMs to withdraw cash, make payments online, or transfer funds between accounts. You can also use the card to make purchases online.

Prepaid Payment Cards vs Traditional Banking – A Comparison

No Overdraft Fees

If you're like most people, you've probably had an overdraft fee or two in the past. Overdrafts are charged when you spend more than the balance of your checking account and can be quite expensive.

Prepaid cards don't charge these fees because they aren't linked to any bank account; instead, they're linked to a pre-loaded amount of money. This means that if you try to spend more than what's available on your prepaid card at checkout, it will decline the purchase automatically without charging an overdraft fee.

No Minimum Balance to Open Account

One serious drawback to traditional banking is that you have to maintain a minimum balance in your account. In order to avoid monthly fees and keep your account active, you need to keep enough money in your account at all times. This can be difficult if you're not earning enough income or if there are months when money is tight.

With prepaid cards, there's no minimum balance required. You can open an account with as little as AED20 and still use it just like any other bank.

No Credit Checks

Prepaid payment cards don't have to be linked to your bank account, and so they don't require a credit check. This means that you can use them even if you're not eligible for other types of credit or loans.

No Salary Certificates

As you probably already know, there’s a minimum salary to open a bank account in Dubai. However, prepaid cards are easier to get because they don't require any employment information or documentation like salary certifications or NOCs from your employer. All you need is a valid mobile number and an identification document, like your passport. You don’t have to be salaried to take advantage of prepaid cards.

Easier to Use Than Debit Cards for Kids and Teenagers

If you have kids or teenagers, you may have noticed that they’re not always the best with money. They might spend more than they have, which is why prepaid payment cards are so useful for them.

They can be irresponsible with their cash and credit cards, but when it comes to prepaid cards there's no worry about overspending or getting into debt. This means that parents can use these cards as an easy way to teach kids how to manage their finances at an early age, and even help them learn the basics of credit management before they're old enough for a traditional bank account.

Conclusion

Prepaid cards offer more flexibility than traditional banking options. They allow you to manage your money from anywhere in the world and can be used at both online stores and physical locations. There are also no minimum balance requirements or monthly fees associated with using a prepaid card--which means you can use it just like cash.

If you’re looking for one, feel free to send us your prepaid card enquiry.

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