A debit card is a payment card that links to a checking account of a bank or credit union. Some mobile money wallets also issue debit cards to their users. The card allows you to access your money 24/7, either when paying online, when withdrawing at an ATM or when sending money to someone else, among other things. You will learn how to transfer money from a debit card to a prepaid card later.
Most people confuse prepaid cards with debit cards. Well, although the two cards work the same, they slightly differ on how you acquire each one of them. While you must have a bank, credit union, or a mobile wallet to get a debit card, you do not need any of those to get a prepaid card. In short, debit cards link to the institutions mentioned above, while prepaid cards do not link to any of them.
Prepaid cards issuers usually allow you to manage your account online. You can either download an app from your card issuer to register online or visit the issuer’s website to open and manage your account. It all depends on your card service provider’s guidelines. However, operating your account via an app is more secure compared to when operating it using a browser. Some browsers may not have adequate security to prevent phishing, and a hacker may easily access your account.
How to get a debit card
Getting a debit card is a straightforward thing. The following are ways you can get a debit card.
i) Open a checking account
You can open a checking account from a bank or credit union. Some banks also issue debit cards for particular savings accounts. To open a checking account, you need the following things.
- Social Security Number
- Phone number
- An identification document, e.g., a driver’s license, a government id card, or a passport
- A physical address, and
- Email address
With all the above things, you can open a checking account online or visit the nearest branch of the bank or credit union of your choice. Online account opening is easier and faster.
When opening a bank account online, you can download the concerned institution’s application or visit their website to fill out your data. After you enter the info, you can then upload your documents for verification. You will also need to request a debit card in the application process.
Some banks and credit unions issue you the application feedback within minutes, while others may take several hours to a few days. Whichever the case, you will get an account. Once your institution approves your account application, they will send you a debit card which you will have to activate as per their guidelines.
ii) Open a mobile wallet account
Various mobile wallets give you a debit card upon request. These include PayPal, Cash App, Venmo, and Payoneer, among others. While some have some restrictions on how you can get the card, others, such as Payoneer, send you your card to your physical address upon request so long as your account is active.
Most mobile wallets require you to have an active email address and phone number when opening an account. Afterward, you can provide additional information such as your identification document and your physical address for account verification.
Unverified accounts have many restrictions, including low daily transaction limits and low amounts of money to hold in your account. Mobile wallets allow you to transfer money from a debit card to a bank account.
How to get a prepaid card
Getting a prepaid card is the easiest thing ever. You do not need a good credit history to get it. Furthermore, even if you are in the ChexSystems, you can apply and get the card successfully.
Most prepaid card issuers allow you to apply for the card online and then send it to the physical address you give them. You then activate the card once you get it in your mailbox.
How does a debit card work?
The operation of a debit card is straightforward. You must have some money in your bank, credit union, or mobile wallet, which connects with the card.
When you spend money with your card, the used amount is dedicated to your account. Likewise, when someone sends money to your debit card, the balance reflects in your connected account. There are several ways you can use a debit card. They include the following.
i) Buy goods and services
A debit card allows you to pay for your goods and services online when you add the card details to the online store’s website. You can also send money directly to the account of the recipient via ACH or wire transfer.
You can also pay for the goods and services at physical stores by swiping your card at the POS systems, automatically deducting money from your account.
ii) Send money
You can send money online using a debit card to other card accounts or banks and credit union accounts. You only have to log into your account online, navigate the money transfer section, and get started. You can also send money to others at an ATM point. Once you insert your card, you only need to navigate the send money section and follow the prompts.
When sending money accounts of the same issuer, you only need the account number of the recipient. However, when sending money to recipients of a different card issuer, you need the routing and account numbers of the recipient.
iii) Withdraw money
You can withdraw money with a debit card at an ATM. You only need to insert your card into the machine and enter your PIN. Afterward, you can navigate to the money withdrawal section, enter the money to withdraw, and press okay.
Your money will come out just below the keypad, whereby you should pick it immediately. When you delay, the machine will retract the money, and your account will already be debited.
How does a prepaid card operate?
A prepaid card operates the same as a debit card. Since the cards do not link to a bank, credit union, or mobile money wallet, you must reload the card at a specific reload center. You may also have someone send you money on your card.
As I mentioned earlier, prepaid cards are independent, and once the balance is exhausted, the card becomes useless. It is important to note that you can use prepaid cards the same way as debit cards. Therefore, there is nothing else different other than how you avail money to use them.
How to transfer money from a debit card to a prepaid card
When transferring money from a debit card to a prepaid card, you must treat the prepaid card as a separate institution. Therefore, the transfer will involve the routing and account numbers of the prepaid card.
You can transfer the funds in two ways. These include the following.
1) Transfer money online
Once you have the routing and account numbers of the prepaid card, you can then log into your debit card account, navigate to the money transfer section and initiate the transfer. You need to carry out an ACH or wire transfer.
An ACH transfer takes several days to complete, while wire transfers are instant. The good thing with ACH transfers is that you can reverse a transaction while not doing the same with a wire transfer.
2) Send money at an ATM
Automatic Teller Machines (ATMs) allow you to transfer money from one card to another. Therefore, you can transfer money from your debit card to a prepaid card by just pressing a few buttons on the ATM screen. You can follow the steps below.
- Visit an ATM, then insert the debit card.
- Choose your preferred language.
- Enter your debit card PIN and press ‘Yes’ to continue.
- Next, choose the “Fund Transfer” option on the ATM display.
- Enter the recipient’s prepaid card issuer and account number.
- Select the type of account. It can be a Savings Bank Account or a Current Account.
- Enter the amount to transfer and click ‘Correct.’
- Next, click ‘Yes to confirm the amount to send.
- The funds will be transferred successfully to the prepaid card account.
Can you link a prepaid card to a bank account?
Prepaid cards can operate without linking to a bank account or debit card. However, if you feel like linking your card to a bank account or credit card, you can do so. It will be good since you will be able to top up your prepaid card balance with funds from a bank or credit union account.
What are some of the prepaid cards?
There are various prepaid cards that you can get as long as they suit you. They include the following.
- Bluebird by American Express
- Movo Virtual Prepaid Visa Card
- Fifth Third Access 360° Reloadable Prepaid Card
Do debit and prepaid cards add my credit scores?
Debit and prepaid cards do not add any credit scores to your credit report. Therefore, they are not good options to add your credit scores to your credit report. If you want credit scores, you should consider applying for a credit card from your bank or credit union.
Some credit cards do not even require you to have a credit history. All you need is to deposit an amount of money to act as your security. Such cards are called secured credit cards.
Debit cards are payment cards that link to a bank, credit union, or mobile wallet account. Prepaid cards do not link to any bank or credit union. However, you can link them to any suitable institution. You can use debit and prepaid cards to buy goods and services, send money, and withdraw funds from ATMs. Debit and prepaid cards do not increase or decrease your credit scores.