Prepaid Card Vs Gift Card
Prepaid Card Vs Gift Card - Our experts answer readers' banking questions and write unbiased product reviews (here's how we rate banking products). In some cases we receive commissions from our partners; however, our opinions are our own. Terms apply to the offers listed on this page. If you're getting something at the last minute, or trying to figure out what a person wants, gift giving can already be a headache.
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Prepaid Card Vs Gift Card
But if you're staring at card options — to avoid shelling out cash — and see prepaid debit cards mixed in with gift cards, which is the better option? Aren't all prepaid cards the same? they are not. But we can help you differentiate between prepaid debit cards and gift cards so you can choose the perfect gift for your recipient.
A prepaid debit card lets you put a specific amount on the card (similar to a gift card), but it functions like a debit card. You can make transactions or withdraw money from an ATM. It also works in any store, as prepaid debit cards are usually part of payment networks such as Visa or Mastercard.
When buying a gift card, the most important thing to worry about is making sure you choose the right store. However, if you're buying a prepaid debit card, it's a bit more complicated. Some prepaid debit cards require additional fees to use certain features. You may be on the lookout for registration fees, monthly fees, and top-up fees, which aren't ideal when giving gifts.
Pros And Cons Of Prepaid Debit Cards
If you also want recipients to take full advantage of their debit card's features, check with the prepaid card company to see if it includes a large network of free ATMs. Used in various stores. When you get a prepaid debit card, you know that your recipient can use it at any store.
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This can be ideal if you are not sure where the person shops. Functions like a debit card. Although there is no checking or savings account linked to a prepaid debit card, your recipient can reload funds as needed. They also have access to the ATM network.
Some have additional fees. Some prepaid debit cards come with an initial joining or monthly fee. With a gift card you only pay for the amount on the card. easy access. Gift cards are accepted at many stores and some financial institutions. There is no additional cost.
After choosing a store, you only need to deposit money on the card. You don't have to worry about any additional steps as gift cards are one-time gifts that provide a pre-paid amount for a specific store. Purpose is limited. A gift voucher can only be used at one retailer.
Pros Of Prepaid Debit Cards
While this can be more thoughtful and personal than a prepaid debit card, you also run the risk of sending the gift card somewhere the recipient doesn't shop. Your decision may ultimately come down to which card is more practical and easier for the recipient to use.
A gift card might be a better option because it shows that you'll take a little extra time to plan something thoughtful based on what you know about the person. You also don't have to worry about any additional charges. Gift cards can also make more sense for kids, since you won't put any pressure on parents to teach them how to use a prepaid debit card.
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If your recipient lives abroad—prepaid debit cards are a common way to send money internationally—or if you're unfamiliar with their preferences, prepaid debit cards may be worth exploring. This allows for more flexibility, so if you're not sure where the person is shopping, you know they can use it anywhere.
Editor's Note: Any opinions, analyses, comments or recommendations expressed in this article are those of the author and have not been reviewed, approved or otherwise endorsed by any card issuer. Read our editorial standards. Please note: Although the above offers were accurate at the time of publication, they are subject to change and may have changed or may no longer be available.
Cons Of Prepaid Debit Cards
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Our opinions are our own. Here is a list of our partners, this is how we make money. Cash is an easy gift option, but what form it should take is another question. Putting the bills in an envelope can work, but it's not ideal: If the cash is lost or stolen, there's no way to get the cash back.
Cons Of Prepaid Debit Cards
Plus, it's easy to forget that cash is a gift once you've stuffed it in your wallet. If you're choosing wisely between gift cards and prepaid debit cards, it's better to keep your cash on plastic cards. Here's something to know. Let's start with how they're similar: Both are prepaid cards, meaning you put money on the card ahead of time to spend in stores and online.
They are also protected against loss if you register them in your name. You can see both types of cards in the same section of a store like Walgreens, so make sure you know which one to pick up. The main difference between a gift card and a prepaid debit card is that a gift card is a one-time spending card, while a prepaid debit card is a reloadable payment option that has most of the features that a checking account and linked debit card have and Fees.
Gift cards serve one purpose: purchase an item from a specialty store brand or any store that accepts a payment network such as Visa, Mastercard, or American Express. They do not allow cash withdrawals, and most are not reloadable. Prepaid debit cards are used for many purposes: to make purchases;
to withdraw cash from ATMs, banks or some retail stores; and to use online features such as bill pay. They are also rechargeable. Because of their flexibility, prepaid debit cards can be used as a budgeting tool and even as a substitute for checking accounts.
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