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With the popularity of credit and debit card use, those without are finding it difficult to function in a society that has become increasingly dependent on electronic forms of payment. These people are likely among the estimated 40 million people in the United States without banking accounts, referred to as the unbanked. Fortunately, there is an alternative for these millions of people needing a way to take care of their financial responsibilities. That alternative is prepaid cards.

Prepaid cards may often be referred to as prepaid credit cards or prepaid debit cards. Whichever term you prefer, they are all referring to the same electronic payment card. These cards have become popular among consumers who don’t have a credit card or checking account because many similar benefits are offered.

Prepaid cards are used like a credit and debit card to purchase goods or services by phone, internet or in-person. For in-person purchases, cardholders have two payment options, credit or debit; debit requires a PIN code and credit requires your signature and ID. They can also be used to withdraw cash from ATM machines and select merchants.

Just like a checking account, deposited money is kept safe in a FDIC insured account. When money is added to the account, the prepaid card represents balance available in the account. This differs from a credit card because cardholders can only spend money they add to their account; no credit is issued, which means no interest rates. This can be useful to those who have a problem spending money they don’t have.

One of the reasons people are turning to prepaid cards over debit and credit cards is the ease of getting a card. Credit or bank history reports are checked as part of the application process for credit and debit cards, making it difficult to obtain an account if any negatives show up on the report. With a prepaid card, an applicant can obtain a card without having their credit or bank history checked.

Before prepaid cards, consumers had no other choice than to use check cashing centers to handle their financial needs, such as paying bills and cashing checks. Although these services provide a useful service to people, they also create a lot of drawbacks. Customers are often left waiting in long lines and paying high check cashing fees, which can reach up to 5% of the check amount. Not to mention, customers are often forced to carry around large amounts of money because most check cashing centers only deal in cash.

With a prepaid card, consumers can do just about everything they would be able to at a check casher, and more. Prepaid cards are usually more convenient to use and less expensive too.

Instead of waiting in line at a check casher, cardholders can have their payroll or other income checks directly deposited into their account, usually free of charge. Also, nearly all prepaid cards offer online access, allowing cardholders to pay their bills and check their account activity over the internet.

The best ways to find the prepaid card that’s right for you is to research and compare different cards. Many comparison websites, such as www.prepaid101.com, will help you compare prepaid cards by providing useful information on a variety of different prepaid cards.

If you are seeking an alternative to traditional plastic payment cards, such as ATM cards or credit cards, a prepaid card may be the right choice for you. They are just as secure as using a credit card and easier to open than a checking account.