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Pros and Cons of Stored Value Cards

Nowadays, online payment has great spread all over the world so usage of stored value cards which is electronic bank debit that used in any purposes of payment. Banks store all its customer’s cash in the stored cards. stored value cards are commonly used as transit system cards, calling cards, payroll cards, rebate cards, gift cards, and cafeteria cards. 

Stored value means anything that isn’t cash, but you can still use to transfer value checks, debit cards, gift cards, and forms like that. These are used to transport some dollar amount which we can later exchange for goods and services. Using Stored value cards has many advantages and disadvantages too, So we will discuss in this article both of them.

Pros of Stored Value Cards

Convenience

Stored value card is a replacement for paper currency for any class.  Using a stored-value card is more like using up one’s cash than depleting a debit card. Businesses can employ workers who are unqualified for direct deposit options because they lack bank accounts, and these workers don’t need to stand in line cashing checks. it’s possible that stored-value cards reduce the probability of filing bankruptcy as compared to credit cards since no debt is created. Store credit cards can be more accessible to consumers without much credit to their name.

Control Costs

stored value card can save you from failure to make a paymentit can be very challenging to complete certain purchases. You can purchase a stored value card in any store. Your card will work only until you have spent all of the stored value. Some retailers offer interest-free financing for new cardholders, which makes larger purchases more budget-friendly if you pay off the balance during the promotional period. Customers in many cases have the incentive to pay off their balance interest-free during a special promotional period.

Cons of Stored Value Cards

It is not required to offer cardholders a clear schedule of fees associated with the cards they sell, and they don’t necessarily provide contact information either. the consumer loses up to five points off his FICO score while filling an application to get a card. Carrying a large balance for an extended period could result in you paying a much higher price for those purchases.

you may only be able to use the card at a specific store. your card might end up sitting in your wallet more than being swiped. The card can’t be used at other points of sale, either, like the supermarket. It’s all too easy to miss that first payment due date when you open a new store credit card account. it can still be counterfeited, although this is much less likely with the varieties with a chip.

stored value cards can be easily lost or stolen. Since they are not tied to you in any way, whoever is currently holding the stored value card controls all the value it has. This makes them very risky to use for larger amounts. The card issuer also usually charges a fee to use the card, and if you maintain a balance, they may charge “storage fees” as well.