The Evolution of Reloadable Prepaid Cards
The ability to use innovative plastic cards like credit cards has emerged as a truly powerful tool in today’s modern world. Nowadays, one can use plastic cards to make reservations, pay for accommodations, and purchase items. Aside from credit cards, people can also now use reloadable prepaid cards.
With the popularity of plastic cards, many people are wondering how people got so dependent on reloadable prepaid cards. The answer is actually more obvious than most people think: people have become hooked to using prepaid cards when they realise how convenient they are to use.
Plastic Cards: The Evolution
To have a better insight and understanding into how today’s reloadable prepaid cards have evolved, we need to go back to where things first started:
Credit cards have been around for quite some time. In American History’s early days, pioneers used credit cards to purchase goods because they didn’t have any money on hand. Back then, sharecroppers relied more on cash advances provided by landowners. They paid back in crops rather than with interest rates based on their percentage of harvest for that specific year.
Stores have also been around since time immemorial and one of the first things they did was define what a credit limit is. Later on, stores eventually introduced trends such as 90-day discounts to entice people to visit their stores more often. Nowadays, these types of promotions are quite common across various retail locations.
In fact, it is not uncommon at all to find stores that provide 90-day interest free offers. Stores also started adapting the idea into what we now know as the typical credit card setup—charge your purchases, take them home with you without paying for anything upfront, then pay for them 3 months after.
Essentially, credit cards represent borrowed money that is eventually paid back over time, either in monthly payments to cover debt incurred from purchasing items that are consumed many months down the line. The first widely accepted credit card was the Diners Club, which was introduced way back in the 50s.
In 1984, banks introduced another financial tool called debit cards. Unlike credit cards that are linked to the bank account of cardholders, debit cards will draw money directly from the balance that’s on the debit card. With debit cards, cash and checks became outdated.
Debit cards also provide an easy way of paying for purchases and transactions without carrying around check books or physical money. This is especially helpful if you are not a fan of carrying huge wads of cash with you wherever you go.
With so many people now using debit and credit cards, it’s not surprising that prepaid cards became popular quite fast as well. In fact, those who use reloadable prepaid cards have grown quite exponentially over the years.
A study conducted by the Federal Reserve Payments Study revealed that 6 billion transactions were carried out between 2009-2010. The total amount of the transactions amounted to a staggering $140 million.
This just proves how valuable innovative financial tools like reloadable prepaid cards have become. As if not enough, the value of reloadable prepaid cards have also increased by 22.9 yearly since 2006.
For those who are looking for a safe way to keep their money, reloadable prepaid cards can be the ultimate choice. Nowadays, reloadable prepaid cards have replaced using cash when paying for groceries, coffees, and other purchases.