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What Advantages do Prepaid Cards have over Credit and Debit Cards?

by Felix Omondi

Image by TheDigitalWay from Pixabay

We live deep in the era of digital technology and electronic payments. The days you needed to carry cold cash to pay for stuff are long gone. That cash now follows you around digitally, provided you have the necessary electronic devices to communicate with your bank account.

The Popularity of Credit and Debit Cards

The most popular form of electronic payment, especially in industrialized countries, is credit and debit card payments. According to the 2021 Diary of Consumer Payment Choice report published by the U.S. Federal Reserve Bank of San Francisco, 28% of consumers preferred debit cards while 27% preferred credit cards. Of the respondents, 19% chose to use cash, obviously for small transactions (sometimes questionable transactions).

While both electronic payment methods have their unique pros and cons, they share some common selling points. That includes the convenience and security of not walking around with cash in your pocket. Something that could become a huge inconvenience if you carry loads of money.

They also expedite making online purchases, which is more common than buying stuff from brick-and-mortar businesses. Digital and electronic payments hugely facilitate eCommerce. Without it, the entire system would run less efficiently and with many trust issues.

The Weakpoints of Debit and Credit Cards

On the flip side, debit and credit cards have unique risks and limitations. The biggest concern for the majority of people with credit cards is overspending. With credit cards, you get to use money that you don’t have and owe your credit card company that money.

A debit card may appear safe on that front; because you get to use the money you own – from your checking account. However, you can quickly max out your bank balance. That puts the consumer into a limitation on buying things they don’t have the ready cash to purchase.

Collectively, both debit and credit cards come with many risks. That includes identity theft, being hacked, and other myriads of cybersecurity threats. Even though many concerted efforts have been put in place by players in the financial sector to protect users, these threats are nonetheless real.

Where Prepaid Cards beat both Debit and Credit Cards

While both debit and credit cards are the default option when it comes to online and digital payment. Other options would be more ideal, particularly in sensitive sectors; case in point, online gambling.

If not for anything else, prepaid cards offer less paper trail than debit and credit cards. Even though technically, a prepaid card works like a debit card. Except for the fact it doesn’t withdraw money from your checking account. Think of it as an electronic wallet in which you top up funds to use for a very purpose.

A good example would be prepaid cards online casinos. It is a common thing, especially among gamblers who want to manage their online gambling more responsibly. Some of the advantages that comes with prepaid cards over both debit and credit cards include:

  • They’re not linked to a bank or credit card company. Whenever you’re using them, you’re not sharing your financial information.
  • The card puts an automatic limitation on how much you can use it for. There will be no overdraft on your checking account (like with debit cards) or huge bills at the end of the month like with credit cards.
  • You obtain the card online, and if you were to lose the physical card, you can simply order its replacement without losing your money.


If you have any activities that you need to pay for with minimum paper trail back to your financial records, prepaid cards would be a safe bet. It is for that reason that it is particularly popular with online gamblers. For their own privacy, and also puts a cap on how much they can spend on gambling. Think of it as a speed-governor for their online gambling escapades.

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