Debit, Credit & Prepaid Cards | Which Should You Choose To Fund Your Startup?

cards

You might be using them every single day, but you may not know the difference between the three and which is the best to use for your start-up company. This article will give you information that will make it easier for you to decide which is best for you. Although they all have many similarities including the providers, the card numbers and the expiration dates, they are to be used for different purposes. The below information will outline the differences between the three.

Debit Cards

Such cards, Visa or Mastercard, will allow you to carry a transaction with the available money that you have in your account. These cards are accepted all around the world. Since all your money will be debited directly from your account, there is no risk that you will spend more than you have. It is also recommended that you keep a regular check on your account balance so that you will be aware of how much money you have available so that none of your payments are declined. 

With most cards, you will receive a mobile notification everything a transaction is processed. This will make you aware of how much money you’re spending and your budget. Some banks might also offer you the option to have an overdraft set with a limit on how much you spend. However, such offers come with high interest rates that depend on the amount you spent over and how long you take to pay the bank back. 

Therefore, this feature is never free of charge. The instant debit cards are the most popular and cheap cards on the market that come along with many benefits. The benefits depend on the type of account that you have. For instance, if you have a premium card, you might benefit from warranties on transactions and insurance.

Credit Cards

Credit cards are very different from debit cards since the bank pays the transactions and then grant you with a credit. Monthly, you will then need to pay the bill of what you had spent. Therefore, the money that you had spent is in a way loaned to you by the bank. When applying for a credit card you need to sign a credit agreement that consists of a spending limit that takes account your income. 

Always be cautious with credit cards as you can spend more than what you have in your account which can result in an unexpected bill at the end of the month. Moreover, credit cards usually come with a costly yearly management fee. Always keep an eye on how much you are spending.

Prepaid Cards

Prepaid cards are known as the new payment method that allows you to spend money without having to link to your bank account. You are able to do all the normal banking transactions within your account including withdrawals, card payments and transfers. You simply have to put money in your card, once you spend it all you need to reload it before spending anymore. 

Most payment providers will set up an e-wallet for you with an online account such as PaySafeCard. This has made PaySafe casinos on Mr. Casinova a popular deposit option. Unfortunately, limits on withdrawals, loading and annual payments are imposed. Some payment institutions who offer prepaid cards do not have a banking license. This is considered to be risky since your money will not be insured.

What to Consider

If you need to choose between the three, consider the following factors:

  • Whether the card is accepted everywhere around the world.
  • Read about the fees and rates imposed.
  • Check that the card meets your needs.
  • Make sure that your money will be insured.

About Mohit Tater

Mohit is the co-founder and editor of Entrepreneurship Life, a place where entrepreneurs, start-ups, and business owners can find wide ranging information, advice, resources, and tools for starting, running, and growing their businesses.