Prepaid cards are accepted for a considerable amount, but not all, types of recurring payments. Their guaranteed service is based upon a given biller authorising Visa and MasterCard or ACH withdrawals, in addition to the online bill pay features held by your card. Please find below a number of explanations of each type of payment:
Billers That Accept Cheques
Normally prepaid cards provide an online pay feature allowing you to make payments to people that cannot accept plastic. By online bill pay, your prepaid card issuer can simply write a check on your behalf and send it to your relevant entity that needs payment. To have a better understanding of which prepaid cards offer the online bill pay and which of these charge for the service, you can carry out a prepaid card comparison.
Billers That Accept ACH Withdrawals
Providing your back-account number and bank routing number is required by some billers in order to allow them to automatically withdraw money on a monthly or another regular basis. This process is called an ACH payment processing and it is the one kind of recurring payment which is unaccepted by a prepaid card. Although you are given both an account number and a routing number for direct deposit reasons by prepaid card users, they are restricted for depositing into your account exclusively, by no means withdrawals from it. This is just a standard characteristic of the accepted practice of prepaid card accounts.
Billers That Accept Plastic
When a company accepts traditional credit and debit cards, then a prepaid credit card can definitely be an approved form of payment, bearing in mind you must register the card under your name. All that is required of you is your name, account number and expiration date as normally you are expected to provide with a traditional credit card.
Sufficient Funds Requirement
Nevertheless, you must take every precaution to ensure that sufficient funds are in your account to cover the expenses of your recurring payments each billing period even if you are using your prepaid card like a traditional credit or debit card or you are availing of its online pay feature. Despite this being very straightforward, you may forget about recurring bills once we have set up a payment method and consequently be simple forget about your prepaid balance. Therefore, your automatic payments will not be made, meaning undesirable service interruptions.
Prepaid cards are certainly more sensitive to insufficient funds than debit cards and credit cards. Yet a lot of debit cards do allow you to opt-in for account overdrafts, which would cover the cost of recurring expenses in case you haven’t got the actual full amount needed in your account. Of course, credit cards provide a line of credit and this can allow you to revolve a balance when a full payment cannot be made each month. One highly effective method to guarantee you have the right amount of money in your prepaid card account to cover the cost of your recurring payment is to either set up a direct deposit of your monthly pay-cheque or arrange automatic transfers from your bank account each month. Basically, the main reason of an automated payment is to ensure that payments are set up and you can simply forget about it. Therefore, verifying your balance every billing would be counterproductive.