There are several payment options available today which do not involve physical cash. For example, debit cards and prepaid cards are now offered by different financial institutions to allow users a means of making transactions. But what is the difference between the two?
What is the difference between a debit card and a prepaid card?
The biggest difference between the two is that a debit card is linked to a checking or savings while a prepaid card is not linked to any bank account. The funds in a debit card are tied to the funds of a bank account and any transactions made using the card are deducted from the account. Some debit cards have overdraft protection in case one spends more than they have in an account. On the other hand, a prepaid card needs to be loaded with money before one can make any purchases or transactions. A person who uses this type of card can only use the available amount on the card.
Banks usually issue free debit cards that comes with opening a bank account but there can be some corresponding banking fees. Prepaid cards often have a monthly minimum fee which must be maintained to use the card.
Comparing Chime Visa Debit Card to RushCard Prepaid Visa Card
In order to have a better understanding of both debit and prepaid cards, let’s take a look at the Chime Visa Debit Card and the RushCard Prepaid Visa Card. Chime is an example of a modern online bank account that offers all the functions of a traditional bank. RushCard is a prepaid card service with some online card management features. Below is a table comparing both Chime Debit Card and RushCard in five key features: fees, mobile app, direct deposit, security, and savings account.
Let’s take a closer look at how the two compare.
There are no hidden charges for Chime Debit Card such as monthly maintenance fees, minimum balance fees, foreign transaction fees, and overdraft fees except out-of-network fees.
Both of RushCard’s plans (Unlimited and Pay-As-You-Go) have regular charges for use. Both plans charge other fees such as out-of-network ATM fees and money transfer fees. An inactivity fee is charged only in the Pay-As-You-Go plan.
Chime has an award-winning mobile app that allows members to keep track of balance and transactions. It is available for download at the Google Play Store and Apple App Store for free.
RushCard also has a mobile app available for download in the Google Play Store and Apple App Store for free.
Chime offers early direct deposit and members will get their pay two days early directly to their checking or savings account.
RushCard also has an early direct deposit feature but the funds can only be credited towards the prepaid card.
Deposits up to $250,000 are insured through Chime’s partner, The Bancorp Bank, Member FDIC; Transactions are protected by the Visa Zero Liability Policy, and the mobile app is protected by two-factor authentication. In case the card gets lost or stolen, the client can block it through the mobile app.
RushCard is also covered by the Visa Zero Liability Policy and the mobile app has a One Touch Access protection. In case the prepaid card gets lost or stolen, clients can prevent new purchases through its mobile app.
Chime’s Savings Account has two built-in Automatic Savings that helps in saving money faster:
- Save When You Spend
- Save When You Get Paid
Users must apply for RushCard’s RushGoals Savings feature to gain 3% annual interest
Both Chime Debit Card and RushCard have similar features but what makes Chime better is that users will not have to worry about any hidden banking fees, making it more affordable overall than RushCard. The latter has been known to have fees that cannot be waived and it is considered as one of the more expensive prepaid cards on the market.
Chime is the better choice
Overall, Chime has more perks and benefits for its clients, especially those who are looking to save and grow their money. Since the debit card is tied to an online checking account, it makes it easier to keep track of all transactions using the mobile app. Chime is the overall better choice when it comes to managing personal finances.
This page is for informational purposes only. Chime does not provide financial, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for financial, legal or accounting advice. You should consult your own financial, legal and accounting advisors before engaging in any transaction.