The prepaid feature, like any other feature, has both advantages and disadvantages. However, when used correctly, it acts as an emergency fund and saves you money in times of cash flow crises. Let’s take a closer look at the pros and cons of this feature.
Advantages of the prepaid credit card function-
- Instant Cash: The main advantage of the prepaid credit card feature is that instant cash is provided in cash. With ATMs accessible 24/7 and available in all corners of the country and abroad, you can access cash anywhere in the country.
- No approval, no documentation: Unlike other forms of credit, such as personal loans or other loans, the prepaid feature does not require additional bank approval, nor does it have to present documents. Take advantage of the ease. All you have to do is use your credit card at the ATM to withdraw money.
- Flexible limits: You can update your credit card limit through consistent spending habits, a decent history with no late payments or defaults. As soon as the bank approves your request to increase the credit limit, your cash limit will automatically improve.
Disadvantages of credit card advances-
- Fees and Charges: An advance is used each time the facility is used, resulting in financing costs that are calculated from the date of the transaction until the refund is paid in full.
- Interest rate: Although the cash advance interest rate is similar to the interest on the card transaction, the cash advance interest is calculated from the date of the transaction until payment is made in full, which it does expensive.
- Reward Points: No reward points are awarded for credit card transactions cash advances. Regardless of the size of the transaction, you will not receive credit points for credit card withdrawals.
- Interest-free period: Another factor that makes credit card advances more expensive is that interest is charged from the date of the transaction until the full payment is made. There is no interest-free deadline for cash advances and interest continues to accrue until you have paid your credit in full.