ATM Vs Prepaid Card
ATM
ATM Card is a PIN – based card issued by a bank to account holders to use it for various purposes at the ATM. Account holders can use it to make purchases by entering the personal identification number. An ATM Card is a payment card or dedicated payment card which enables a customer to access this financial accounts via its and others’ automated teller machines and to make approved points of purchase retail transactions , ATM Cards are not credit cards or debit cards
Prepaid Card
A prepaid card is not linked to a bank checking account or to a credit union share draft account. Instead, you are spending money you placed in the prepaid card account in advance, this is something called “Loading money onto the card “.
In most cases you can’t spend more money than you have already loaded onto your prepaid card, overspending can occur with a checking account for some types of uses, and with a bank account debit card if you have “ opted in ” to your bank’s overdraft program. This means that your bank may charge you a fee for covering the cost of a purchase or ATM withdrawal that exceeds what you have in your account, your bank will also require you to repay the overdraft.
Prepaid cards are very different from credit cards, this can be confusing because both types of cards may have a card network logo such as Visa, Master Card, American Express, or a Discover on them.
When you use a credit card, you are spending money you have already loaded onto the card in advance, if you prepaid card provider also offers credit (including overdraft) on your prepaid, it will need to comply with all the rules for other credit cards. Prepaid cards and debit cards are both widely accepted at merchants globally, but one is preloaded and other is not.
Advantages of prepaid card
1- Prepaid cards offer less risk of overspending than credit cards.
2- It’s safer than cash.
3- Easy to use and reload.
4- Secure alternative form of payment.
5- An alternative to banks.
6- You can withdraw money in limited way.