What Is A Prepaid Debit Card? - YouTube

What is a pre-paid debit card and how exactly is a pre-paid debit card different from a

regular debit card?

By the end of this video, you're going to understand exactly what a pre-paid debit card

is and everything that you basically need to know about it.

If you're new here, welcome.

My name is Annie Margarita Yang.

This video is part one in a four-part series about pre-paid debit cards, so please subscribe

and hit the bell icon for notifications.

I'm not here to sell you anything and I'm not sponsored by anyone.

I'm basically just someone who has spent several years of my life earning a low income and

trying to make do with what I had, maximizing every single limited resource that I had,

including money so that I could slowly build the life that I want.

So all I want is for you to get good personal finance advice.

Advice that does work, especially if you earn a low income because you are basically underserved

by the personal finance industry, so please subscribe for more videos.

What exactly is a pre-paid debit card?

It is basically an alternative to a banking product, AKA, an alternative to a checking

account and you can reload money, which means you can add money onto this card and you can

only spend the amount of money that is loaded onto this card.

You can buy pre-paid debit cards at supermarkets, convenience stores, other retail outlets,

some banks, or directly from the companies that issue them.

There's absolutely no credit check required to get a pre-paid debit card so it's really

easy to get one and you can add money to it either through direct deposit from your employer

or through transferring money online from a bank account that you already have or by

adding cash in person at a participating store.

A participating store could be something like Walmart, 7-Eleven, CVS, Rite Aid, but it depends

on the card.

In order to access all the features of a reloadable pre-paid debit card, such as adding more money

to the card if you bought it at a retail store, you're going to have to register the card

with the card provider online, which again is really easy.

I'm going to explain to you just how pre-paid debit cards are very, very similar to regular

debit cards from the bank and just exactly how they are different.

So how are they similar?

Well, they're very similar in that you're spending your own money.

You're not spending money that you borrowed from the bank through a credit card that you

have to pay back later.

You're only spending the money that you have loaded onto the card.

Every time you spend money on this card, you are reducing your balance and because you're

not taking on any debt, just like a regular debit card, you're not building any positive

or negative credit history.

The second similarity is that these pre-paid debit cards have logos on them just like any

other debit or credit card.

They will have the Visa, MasterCard, Discover, or American Express logo on them and any store

that takes these cards will also take your pre-paid debit card.

The third similarity is ATM withdrawals.

Just like a regular debit card, some not all pre-paid debit cards will also let you do

ATM withdrawals up to the amount that you have loaded onto the card.

The fourth similarity is fraud protection for unauthorized charges.

You do have some of the same consumer protections in place in case your card gets lost or stolen

and is used to make unauthorized charges.

But to be able to access this feature, you do need to register your card just like I

mentioned earlier in this video and you do need to report when it gets lost or stolen

right away to the card issuer, just like any debit card or even credit card in order for

them to open an investigation and for you to get your money back.

After all of this, just how exactly is a pre-paid debit card even different from a regular debit

card?

I mean, they're just so similar.

Well, the main thing is that it's not tied to a checking account from a bank, so you

cannot write any checks and the other thing is that because you can only spend the amount

of money that is loaded onto this card and nothing more, it's basically impossible for

you to overdraft on this card.

There are some pre-paid cards out there that do let you overdraft, but I don't recommend

you get a card that lets you overdraft.

Why would you want to spend more money than you have anyway?

I mean, you shouldn't spend more money than you have.

That's basically the only difference, no checking account and you can't overdraft.

Okay.

That's pretty much all the basic information you need to know about pre-paid debit cards.

You're probably wondering just why I'm going to make a four-part video series about pre-paid

debit cards.

Well, the fact is that 5% of US households do not even have a bank account so that's

who I'm trying to talk to you right now.

If you're in that 5% and you don't have a bank account then a pre-paid debit card is

basically an alternative to a banking product.

It's an alternative to a checking account and I want to talk to you about it.

In my next video, I'm going to talk more about whether it's a right fit for you and if you

happen to be in that 5% category, I do want you to watch the entire series.

So please do subscribe and hit that bell icon for notifications.

All of the information that I provide here on my YouTube channel is free for you.

If you want to show your support financially for my channel, please go on Amazon and buy

my book, 1001 Ways to Save Money: Quit Flushing your Hard-Earned Money Down the Toilet and

if you're one of my viewers who have already bought a book, please, please, please leave

me a review.

That would totally make my day if you just gave me a review.

Okay, that's it for you guys today.

If you like this video, hit that like button.

If you know anyone who doesn't have a bank account, please do share this video with them

because it would add so much value to their lives.

I wish you a very prosperous day today and I will see you next time.

Bye.