The pros and cons of prepaid debit cards – Microsoft 365 (2024)

FAQs

What are the cons of prepaid debit cards? ›

Disadvantages. Pre-paid debit cards do not help you build credit. Many pre-paid debit cards charge fees before you even start using them. There is usually a monthly fee and fees on common transactions such as ATM withdrawals, card replacement, direct deposit, and reloading the card.

Yes. You can use pre-paid credit cards to perchase Office 365 subscriptions.

There are only a few downsides to using prepaid cards, but they are significant. Prepaid cards come with fees. Cardholders may have a lot of fees, including activation fees, transaction fees, ATM withdrawal fees, reloading fees, monthly fees, or inactivity fees.

Fees: When you use a prepaid debit card, the provider may charge you a variety of fees including activation fees, monthly service fees, transaction fees, overdraft protection fees, ATM fees, and more. These costs can add up over time and make it expensive to use this type of payment method.

Most prepaid cards charge costly fees that can include a transaction fee for every time you use the card. Other fees to look out for include annual or monthly maintenance fees, cash reload fees, inactivity fees, foreign transaction fees, balance inquiry fees and more. Won't help build credit.

No Credit Reporting

As mentioned above, prepaid cards, like other debit cards, do not report your transaction information to credit bureaus, so they are of no value if you're trying to build a credit history or improve your credit score. In that case, you may be better off applying for a secured credit card.

If you have an MCA billing account type and you're a Billing profile owner or contributor, you can use the billing profile that's backed by a credit or debit card or invoice payment to make purchases or pay bills.

Pay a single, one-time cost. Pay a small monthly fee, or save by paying for a full year. Get Microsoft 365 apps like Excel, Word, and PowerPoint. Get the fully installed and latest versions of Excel, Word, PowerPoint and Outlook, and OneNote for Windows or Mac.

You can add your credit card, debit card, bank account, PayPal account, or mobile phone as a new payment method for your Microsoft account.

With a prepaid card, you cannot borrow money. 3 (It does not function like a credit card.) You only have access to the funds loaded on the card, which can be reloaded, but you cannot utilize more money than you have. As such, prepaid cards do not build credit.

Why are prepaid cards not accepted? ›

Prepaid cards can be declined because you don't have sufficient funds in your account, the card hasn't been activated, the merchant doesn't accept the network's cards, or you have exceeded your spending limits. Any information you provide to the merchant must also match what's on file with the prepaid card issuer.

Using Prepaid cards, one can buy anything from anywhere at any time. This allows criminals to purchase goods and services using their illegal money from any part of the world.

Some fraudsters may tamper with your prepaid cards or clone them after scanning them. Once you add money to the compromised card, they can steal your funds.

You can't spend more than what you've loaded onto a prepaid debit card. Some debit cards will let you overdraft your account, but you could incur hefty overdraft fees. However, prepaid cards are more likely to have monthly fees and purchase fees.

Disadvantages of prepaid debit cards

Prepaid debit cards may have additional fees associated with ATM withdrawals, card replacement, direct deposit, inactivity, card cancellation, paper statements, and card reloading.

You don't have enough money left on your card. You haven't activated or registered your card. The address you gave to make an online or phone purchase is different from the address you have on file with your prepaid card provider.