In the past, I’ve talked about using cash, credit cards and debit cards as methods of payment, as well as their pros and cons, but I have never covered the topic of the prepaid debit card.
They are a new hybrid that I’ve seen popping up lately, and seems to be a marriage made in heaven between cash and debit or credit cards.
It’s a card that you load with money, and spend like a debit or credit card.
And I really like it. —————->
Picture this:
I am sure you’ve gone through times when you’ve had $100 in your pocket, and have forgotten to keep (or couldn’t get) a receipt on more than one occasion, thereby losing your only proof to remind you of what you spent that hard earned green on.
Well, these cards are great because they have built-in controls to help you keep from overspending, going into overdraft, accumulating more credit, or just to even track what you spend because you’ll be able to see every single transaction.
The pros are:
- You don’t have to carry cash on you (safer than cash)
- You cannot tap into your overdraft (better than a debit card, if you lack self control LOL)
- You cannot go into debt by spending money you don’t have (a big bonus over credit cards)
- It has a security feature where you type in a PIN (safer than cash)
- It’s FDIC-insured so you won’t have to worry if your card gets stolen (safer than cash)
The cons are:
- If you don’t load your card with money, you don’t have any to spend (let’s be honest, is this really a con?)
Who can best benefit from a pre-paid debit card?
- Young preteens
- Teenagers
- College Students
- Anyone who needs a bit of external control in place to stop from overspending into the red
And the coolest thing about pre-paid debit cards?
You can receive points with some companies, or every time you use the card, you get them to donate something towards a worthy cause like Breast Cancer Research.
Cancer is a disease near and dear to my heart due to its effects on my family (which you all know is the reason why I like donating to the Canadian Cancer Society).
If you can make a change just by using a card that helps donate towards what you believe in, it makes every (sensible) purchase you make all the more powerful.
Even buying a $1 chocolate bar can help donate towards a charitable cause.
Now that is just plain cool.
Has anyone had luck with their own prepaid debit cards?
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Little House
on Oct 17th, 2009
@ 2:52 PM:
I’d like to add one more pro to these pre-paid debit cards, they’re great if you’re traveling and don’t want to carry traveler’s checks. I did this a couple years ago, when I was still spending money
, and it worked really well.
-Little House
Little House´s last blog ..Halloween Decorations That Won’t Scare Your Wallet
Last Born Child
on Oct 17th, 2009
@ 3:14 PM:
I used to have something similar when I was under 18 (years ago yes lol)
I liked it at the time because there was no issue of getting into debt and I knew it was my money I was spending so those cute shoes, so it had to be pot noodles for the rest of the month.
SS4BC
on Oct 17th, 2009
@ 3:16 PM:
One thing to mention though is that not all businesses take debit cards for transactions (pre-paid or not). For instance, when I was buying my airfare in Europe I HAD to use a credit card – not even a debit card with a Visa or Mastercard logo would be accepted.
I’m not sure how the businesses can tell, but apparently they can – and I had to use my credit card and then transfer money over from my debit card.
So it is still worthwhile to have A credit card somewhere in the back recesses of your life for the once every few years instances where a debit card isn’t accepted.
SS4BC´s last blog ..Percentage of My Income to Debt and Savings
beth
on Oct 17th, 2009
@ 7:41 PM:
I think I might do this at the beginning of the month with my “wants” money. I really really really screwed up my budget for October but in November I’m going to try alotting 50% net income to things i need from month to month like groceries, rent, laundry, etc; 30% to things id like to have like going out to movies or to eat or shopping; and at least 20% if not spillover from the fun section into savings; saving for something for myself or gifts for other people or because everyone needs money just in case. i can put that 30% or so on a prepaid card and use that so i dont go over balance. this way i can keep putting groceries on my credit card (rewards points for things i was going to buy anyway) and pay it right back from my checkings account.
Caleb
on Oct 17th, 2009
@ 10:18 PM:
A big disadvantage to the these cards that hasn’t been mentioned yet are the fees associated with them. Issuing fees are usually several dollars and reload fees are $3 at the retail store I work at. If you are smart and load large chunk of money maybe once a month you can keep those costs to a minimum, but if you are adding money a weekly basis those costs will add up quickly. Similarly, you generally don’t have any free atm access.
Julie
on Oct 18th, 2009
@ 1:02 AM:
I love my pre-paid debit card!!! It is so great when you don’t have self-control, want to track your cash and want to keep it safe. I’ve used mine while traveling and to pay for copious amounts for Starbucks. I lovelovelovelove it!
Julie´s last blog ..I miss London
Julie
on Oct 18th, 2009
@ 1:03 AM:
Oh and BTW, mine being specially for starving students, doesn’t charge me any feeds at all. The only downside is that I can’t use it on the internet T_T.
Julie´s last blog ..I miss London
FB @ FabulouslyBroke.com
on Oct 18th, 2009
@ 7:34 AM:
@Beth Read the other comments regarding fees and whether or not merchants will accept such a card as well!
beth
on Oct 18th, 2009
@ 2:20 PM:
hopefully i can find one like julie did, b/c i am also a student! but ill do some more research, once my homework is done! thanks for the tip though!
Bonne Vie - Wholestyle on the Web: Week of 10/23
on Oct 23rd, 2009
@ 5:33 PM:
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