The ups and downs of prepaid debit cards

Following the financial crisis of 2008, a growing cohort of consumers have turned to alternative credit options to manage their accounts. One of the most popular methods consumers, especially the unbanked and underbanked, have turned to is reloadable prepaid cards. These cards are nearly identical to credit or debit cards - they just don't require a bank account or credit check. However, prior to signing up for a prepaid card, there are a few things consumers should consider. For instance, prepaid cards have limited protections, according to The Los Angeles Times. Issuers offer limited protections to users in case of hacking, but those who do label them "zero liability." Additionally, consumers who are looking to improve their credit scores will receive no help. Why? Because with a prepaid debit card, money is not actually being borrowed, the paper explains. Thus, none of the three major credit reporting bureaus take the alternative finance method into account. There are considerable upsides for users of prepaid debit cards, especially those who would like to eschew the increasing number of regulations and rules being implemented by financial institutions.