Are Gold Backed Prepaid Cards the New Standard?

The following post is by Luis Aureliano. Enjoy! 

Gold has been held as a store of value from time immemorial. This is because when compared with money, gold is an item which does not get damaged and does not lose value in a precipitous manner. If you throw in $1m in cash into fire, it gets destroyed completely. If you push gold into fire, gold comes out unscathed. It may liquefy, but if thrown into a mould, it gets back into shape without being lost in any way.

This is why most governments keep gold reserves to back up the value of their currencies. It is also why in times of global market upheaval, we see a hefty demand for the metal commodity, which ends up pushing its price upwards. Over time, the price of gold has actually experienced a steady rise. From just under $300 an ounce about fourteen years ago, gold now sells for above $1,000 an ounce. But a comparison of the exchange rate between the US Dollar and the Euro fourteen years ago when the single currency replaced local currencies in the Eurozone, shows that the exchange rate between both currencies has not changed so much.

So it just makes logical sense to preserve at least a portion of your investments in gold. However, there is a new innovation in the prepaid card industry and that is the storage of money in prepaid cards in the form of gold units.

The Prepaid Card Innovation: Gold-backed Prepaid Cards

Perhaps one of the best prepaid card innovations in the world today is the development of a prepaid card which has the ability to be redeemed with physical gold bullion from your directly from your account and spend your funds in currency. Prepaid cards are by nature, not credit cards. You can only spend money on a prepaid card when there is money on it; you cannot spend money on a prepaid card with zero balance.

Benefits of a Gold Prepaid Card

Using a prepaid card directly linked with your vaulted gold savings comes with many benefits. Some of these are listed as follows:

1. The prepaid card enables users to preserve the value of their money. The users can have their savings in their gold bullion and redeem to the prepaid card to take profits from the rising price in the metal. The liquidity and transactional value from this is unprecedented.
2. Gold is a great way to save. Gold has gained more than 3,000% over the US Dollar since the era of fiat money was ushered in by Richard Nixon’s government in 1971. We’ve already pointed out that gold has multiplied in value where the EURUSD exchange rate has virtually gone back to its introductory rate in 2002.
3. For those who love to shop online or want to perform remittances (both services which may require currency conversions), the prepaid card works perfectly as it helps save on transfer fees.

How a Gold-Denominated Prepaid Card Works

You may be wondering how a prepaid card works. In a few sentences, this is explained below:

1. You will have to order a prepaid card from a company which provides a service where funds in a prepaid card are held against a gold standard. One of such services is the GoldMoney® Prepaid MasterCard®, offered by BitGold.
2. When you apply for the card and are approved, you can purchase gold units and add same to your account. You can check the balance of your gold on the website of your card provider. Whenever you want to use the card, you can sell your gold savings in exchange for cash on your cards.

The prepaid cards can be used in the same way as any other credit or debit card. The cards can be swiped at retail point-of-sale (POS) terminals, use for online purchases or used for cash withdrawals at a local ATM in your local currency. The funds are protected and preserved with real, vaulted gold, meaning that you will end up not paying any interest on purchases.

Conclusion

With the economic uncertainty in today’s world, it is imperative that we all start to live smart and get the best monetary deals that the world has to offer. One of such deals we will find useful in everyday life is the use of gold-denominated prepaid cards.