Prepaid cards work on the theme of pay now and use at your convenience, very similar to prepaid mobile phone cards. All you have to do is buy a card, load it with the desired amount and the card is ready to be used. You do not require any account to use these cards.
Prepaid cards are convenient alternatives to cash and cheques and benefit cardholders in a number of ways:-
Cardholders can use prepaid cards to pay various merchants payments and e-Commerce transaction. FTC cards / EZ-pay cards can also be used for withdrawing cash at ATMs.
Cardholders can make purchases or get cash when they need it (FTC/EZ-Pay cards), rather than carrying large sums of cash. Access to funds on a prepaid card is protected by a PIN at ATMs and cardholder's signature and at merchant locations.
A prepaid card can be replaced on request, if lost or stolen.
Itemized statements and online reporting make tracking of expenses and monitoring card activity easier and more efficient than cash or cheques. Also, cardholders can better budget their finances by limiting spending to the amount of funds that have been loaded to a prepaid card.
For people without a bank account, prepaid cards provide the convenience and security of a card product without requiring an existing banking relationship or credit history.