Credit, Debit, Prepaid: The Three Cards to Keep in Your Wallet

January 5, 2018





Going cashless has become a much safer and more convenient way to make transactions these days. It makes our lives much easier too because we don’t have to panic about being low on cash while paying for daily necessities, neither do we need to miss out on a really great deal on plane tickets or hotel accommodations we found online.

There are three cards that we use when making e-payments — prepaid, debit, and credit. And while you may favor one over the other, each one serves its own purpose across different situations.

So to better help you understand all three cards, here’s what makes each one unique.


    1. Prepaid Cards

      Prepaid cards are perfect for those who don’t have existing bank accounts or just need a new way to budget their spending. This is your basic tool to jumpstart your cashless shopping; you just have to load the money in the card in advance, and you’re good to go. It’s kind of like having a virtual wallet where your expenses can’t exceed the amount you have on hand. This makes staying within budget much easier as you’re putting a limit to what you’re only able to spend for the day, for the week, or even for the month.

      It's a great cashless alternative to the envelope system of budgeting where you allocate your budget for the month into different envelopes labeled in different household categories. You can have an assortment of prepaid cards for different purposes. You can have one for your child’s weekly allowance, one for household errands, and one for your shopping expenses so you won’t ever go overboard.

      Prepaid cards are also very easy to own. No time-consuming application forms. You just have to sign up for one and pick it up at your bank of choice with one valid ID. It even makes you eligible for discounts and promos in partner merchants locally, worldwide and even online so you can get better access to the finer things in life just by being cash-free!



    1. Debit Cards

      Debit cards are linked to a savings or a checking account. They’re very nifty because it allows you to have easy access to cash through an automated teller machine (ATM), and at the same time pay for your purchases just by using it.

      So when you use a debit card in making transactions, it directly deducts the amount from your bank account. This makes it great for your small, everyday purchases which you wouldn’t want to pile up and earn interest if you used your credit card for them, like when you’re buying stationery supplies at the bookstore, afternoon snacks from the convenience store, or a Starbucks drink — the kind of expenses that are small enough to use cash for, but for which you’d rather go cashless.



    1. Credit Cards

      Credit cards are the best for large expenses like hotel deals and big-ticket items. It follows the “buy now, pay later” mindset which means you can completely enjoy your purchases even without paying for them first. But because you’re only essentially borrowing money from the bank, you’ll incur interest over the months if you don’t pay in full every month.

      Credit cards give you the added benefit of installment payments, that is, spreading the amount to pay over the course of a few months or even years. You’ll also be treated to a lot of perks and discounts from partner merchants like retail stores, airlines, airport lounges, and concerts to name a few.

      You can use credit cards virtually anywhere and with anything. From household appliances to airplane tickets, all it takes is one swipe or tap and it’s yours.
      But with great power comes great responsibility. You’ll be required to have good credit before you apply for this card, and you need to be diligent enough to pay for your transactions on time when they are due.

Each of these cards will answer a variety of your needs. It’s helpful to be equipped with all three as long as you know when it’s best to use each one.


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