Thinking about cancelling your credit card but still need a means to pay by plastic? With a stored-value card (or prepaid card), you can enjoy all the benefits of credit facility but with the added advantage of being able to control your expenses, using its preloading mechanism. If you need more reasons to switch over, check out these seven key advantages.
No income document required
The greatest proposition of a prepaid card is that anyone can get it. There is no submission of salary slips or EA forms required. This allows people earning minimal incomes, especially fresh grads whom have just entered the workforce, to enjoy the benefits of paying with plastic even though they may not yet qualify for the minimum income requirement of a standard-tier credit card.
Gives you better spending control
Just like a debit card, the prepaid facility only allows you to make purchases with the money you already have. If you want to buy an item that costs RM100 with a prepaid payment card loaded only with RM50, you simply wouldn’t be able to. Because of this, it makes for a great instrument to control your spending and ensure that you’re not splurging beyond your means.
No debt trap from towering interests
Due to massive interest rates as high as 17.5% p.a. as well as the ability to make purchases on credit, the potential of accumulating a towering debt from credit payment cards is very real. A stored-value card, on the other hand, does not allow you to make purchase on credit and hence has no concept of “interest”, which mitigates all risks of you getting into debt issues from its use.
Offers greater security for your money
All financial card products have the potential of being misused via fraud and identity theft, and this is no different for a prepaid facility card. But compared to a debit card (which is linked to all the money in your saving account) and a credit card (which usually has five-figure credit limit); the prepaid facility offers you greater protection on virtue that you only stand to lose the money you’ve preloaded.
Works just like any other card
With the exception of the need to preload money, it works just like a credit payment card. This means you’ll be able to pay for your purchases at any outlets displaying the Visa or MasterCard sign (depending on the type of cards you have), be it locally or overseas. Best of all, they can also be used for online payments.
Due to increasing competition in the financial sector, some banks now offer stored-value cards that come with point-based reward programmes similar to most of the credit facility cards in the market. By accumulating points you acquire from card transactions, you can redeem gifts and vouchers. One such prepaid facility with a reward programme is the Maybankard Manchester United Visa Prepaid.
No government tax
Like tens of thousands of other Malaysians, you may be frustrated by the RM50 annual government tax you need to pay for every principle credit payment card you hold. Fortunately, the said tax does not apply to a prepaid cardholder. This means you’ll be able to enjoy all the convenience of paying by plastic, without the tax that comes with it. Want to get a prepaid card? Most banks in Malaysia offer it. To get one, simply approach any bank and enquire at the service desk.