Why You Need a Prepaid Debit Card Even If You Have a Bank Account

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Many people think prepaid debit cards are just for people who don’t have a bank account. After all, checking accounts usually come with a debit card that can be used just like a credit card. Why would someone with a bank account need a prepaid debit card?

Why You Might Need a Prepaid Debit Card for Business

While prepaid debit cards are useful for those without a bank account, the following benefits apply to everyone.

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Private transactions

When you need to make a private transaction, a prepaid debit card is the best solution. Technically, you can also use cryptocurrency, but not every merchant accepts crypto. You don’t need a specific reason to keep your purchases private. Maybe you don’t want advertisers to know what kind of groceries you buy, or you may want to buy controversial products without having the purchase traced back to you.

Whatever your reasons, you’re entitled to make anonymous purchases. However, to make your purchases completely anonymous, you’ll need to buy your prepaid card from a store with cash without entering any type of loyalty card number. Otherwise, your purchases could be traced back to you at some point. Even if you’re not doing anything illegal, there will be a trail back to your name.

The downside to prepaid cards

There’s only one problem with store-bought prepaid debit cards: the monthly maintenance fee. Just like calling cards, prepaid debit cards usually charge a monthly fee that gets deducted from the unused balance. That’s not good for people who need to use their cards on a regular basis. It’s just one more fee to add to their growing list of expenses.

The happy middle ground

For those who need access to private transactions on a regular basis, Chime offers free debit cards for pre-paid spending accounts with no monthly fees. The added benefit to using a Chime card is that the total for each purchase is rounded up, and that difference is deposited into a savings account. The card is also replaceable if yours is lost or stolen.

2. No overdraft fees

Overdraft fees are easy to avoid when you manage your finances properly. However, sometimes a paycheck doesn’t line up with a monthly charge. If you’re prone to overdraft fees because your paycheck timing doesn’t line up with your monthly bills, putting some of your bills on a prepaid card will help you avoid overdraft fees.

When an item bills on a prepaid card that has no funds, the purchase will be canceled. You’ll still need to handle the transaction with that merchant, but at least you won’t charged an overdraft fee when you don’t have sufficient funds available.

3. Protection for uncertain purchases

A prepaid card is great when you want to buy from an online store, but you’re not sure you can trust the site. Sometimes websites look shady because the developer hasn’t finished, or the business tried to make their own website. Other times, websites look shady because they’re actually scams. It’s hard to tell.

Having a prepaid card makes it easy to buy from online stores you don’t entirely trust with your credit card information. You can load a prepaid card with the exact amount of money needed for your purchase, and if the company steals your credit card information (or if they fall victim to a data breach like the infamous Equifax breach), they won’t get any more of your money. That brings up the next point…

4. Protection from future data breaches

When you make a purchase online or even in-store with your credit card, if that company suffers a data breach, your card number could be jeopardized for months before you’re informed. By that time, hackers and cybercriminals could easily wipe out your bank account. If you have direct deposit or a large balance, they could end up wiping you out for a lot of money.

If you use a prepaid card for all of your online purchases, and you don’t keep a large balance, you don’t have to worry about losing money in a future data breach. If hackers get your prepaid credit card number, they won’t get much money, and you can ditch that card and get another one.

Keep a prepaid debit card on hand for good measure

You never know when you might want to use a prepaid debit card. Keep one on hand that you can refill so you’ll have it available when you encounter a situation that requires using a prepaid card.

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Larry Alton Larry Alton is an independent business consultant specializing in social media trends, business, and entrepreneurship. Follow him on Twitter and LinkedIn.

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