Prepaid debit cards are the wave of the future folks. Get used to it. They make sense in this tough economic climate and they’ll also make sense when the economy rebounds. More and more people are discovering that spending money that you have is a better way to go than spending money that you don’t have (credit) and prepaid debit cards are the best financial tool for doing just that.
Now there are a lot of reasons why these prepaid Visa cards and prepaid MasterCards are useful, but let’s just look at three.
No Credit Check
Prepaid card companies are selling you a product, not credit. So there’s no need for them to do a credit check before they issue you a card. That’s great news to the many people who have no credit or very poor credit because it means they’re guaranteed approval. And that means they can acquire a card and use it to make all of the same kinds of purchases that anyone with a normal credit card can make.
No Monthly Finance Charge
Credit card companies make a lot of money by charging you a finance charge on the balance that you have outstanding. That charge can be calculated any of several different ways and the terms can be changed just about any time the credit card company wants to change them. But prepaid debit cards carry no credit balance so there’s no finance charge. Instead there’s a monthly maintenance fee which is usually pretty low and which doesn’t change from month to month. That saves you money in the long run and makes it much easier to manage your finances each month.
No Long-Term Contract
Once you’ve charged up a balance on a credit card, you have virtually no control over your relationship with the credit card company. That is of course unless of course you can pay off the complete balance. Most people can’t do that, so they’re stuck with whatever terms the credit card company wants to throw at them. And those changes are almost always made to benefit the credit card company, not you.
But with a prepaid debit card, your relationship is different. You’ve pre-loaded your card; the money is already yours, and the prepaid card company is in no position to change terms on you. If they were to do that, you could simply spend or withdraw your money and take your business elsewhere. You’re in the driver’s seat not the company so you can end your relationship with them whenever you want to. That’s a powerful position to be in.
If you’re starting to come around to the idea that paying as you go is a better way to manage your finances than using expensive credit cards, then you’re a prime candidate for a prepaid debit card. Do yourself a favor and learn more about this popular and powerful budgeting and financial tool.