Alternative Payment Card Options

Payment cards provide a secure and convenient alternative to cash and checks when making purchases. Fundamentally, payment cards, such as a credit card, work on the "buy now pay later" principle. Other non-credit options available include Debit cards or Stored-Value/Prepaid cards.
Debit Cards
Debit cards are payment cards that provide a convenient and secure alternative to cash and checks. The purchase amount is deducted from the cardholder’s bank account at the point of sale, so there are no interest charges incurred. In most cases, the individual does not need a credit history to get a debit card. However, the cardholder cannot withdraw more from the account than what has been deposited. A debit card is similar to an ATM card in that it allows access to checking and savings bank accounts via ATMs.

Cardholder Benefits
  • It’s easier and safer than carrying a lot of cash.
  • It has worldwide acceptance.
  • It can be used at an ATM for cash, transfers or account information.
  • There are generally no finance charges (unless an overdraft line of credit is activated).
  • It helps track spending – purchases appear on a monthly account statement.
  • Recurring bills such as membership dues can be paid automatically.

Money Management with Debit Cards
Using a debit card is a good way for cardholders to manage their account more efficiently. Every ATM transaction and purchase will appear on your monthly statements. Cardholders should:

  • Be aware of any spending and withdrawal limits or fees for their debit card.
  • Routinely balance their checkbooks with monthly statements; making sure every transaction amount is correct.
Stored Value/Prepaid Cards
A stored value or prepaid card looks like a classic credit card, but works more like a debit card. There are no finance fees or interest since charges are deducted from a balance that you pre-pay. Coupled with guaranteed approval and the ability to withdraw money from ATMs, the pre-paid card is a great option for many consumers.

The concept of prepaid cards is really very simple. You open an account and "pre-load" the card with cash up-front, similar to a pre-paid calling card. The card - for instance if it’s a MasterCard pre-paid card - can then be used everywhere MasterCard cards are accepted at, including online merchants and retail stores.

Once the balance is consumed by charges or ATM cash withdrawals, the card must be recharged with more funds via a cash deposit or wire transfer. This way, you’ll be able to avoid spending more money than you can afford.

Cardholder Benefits
  • There are no interest charges. When you use your prepaid card, you're not borrowing any money. The fact is that you are using your own money so you pay no interest!
  • Prepaid cards are unlikely to lead to debt or credit problems as you are not borrowing any money.
  • You can use them almost everywhere.