A prepaid debit card may be able to make a difference to the way you manage your spending and may help you avoid debt.
Plastic in your pocket
We all know the convenience of having plastic in your purse or wallet.
It’s not only more secure than cash but in some instances it’s absolutely essential for things such as automatic ticket machines or online / telephone purchases etc.
The trouble is that credit card plastic tends to come with a credit limit that can all too easily encourage us to spend more than is advisable – then subsequently struggle to pay it back.
Similarly, the bank debit card typically makes all of our money available to us at one time and this again may encourage over-spending. Few of us would, for example, be happy at handing our bank account card to one of our children going out for the day.
Prepaid debit cards – a different approach
Prepay cards can be in many respects indistinguishable from any other card and is fully compatible with most card-taking machines. Benefits typically include:
- it differs to a credit card in that you load money onto it and can then use the card to spend that amount of money – and no more!
- it’s potentially a way to control your spending;
- if you have children, it gives them something that’s a bit safer than cash to carry around;
- if it’s stolen, you can stop its use with a simple phone call. Even if it was used and your money lost, typically you can only lose to the maximum amount you’ve loaded onto it;
- often available to people who have been rejected for a credit card and / or bank account previously;
- an associated e-bank account, side stepping the need for a traditional bank account (do note that this may not be available with all prepaid cards);
- SMS notifications every time your card is used (there may be a small fee for this service and not all prepay cards will offer this feature);
- prepay cards can be used at selected ATMs in the UK and abroad as well as outlets displaying the brand name acceptance mark (eg prepaid MasterCard), so, if you are travelling, you don’t have to worry about carrying around traveler’s checks or large amounts of local currency.
Easy and fast
As you are not using credit, most prepaid card providers typically don’t make credit checks on your background. And even if you have some credit history problems, you can typically still obtain a prepaid card.
Cash can be loaded onto it at any PayPoint or you can have your salary (or part of it) credited directly to the card. As mentioned above, some providers may even provide an e-banking account to go with it so you can move money from your account onto the card, as you need it.
If you have an activated Speed-e-card, this prepaid card is in unique in that you can load a Speed-e-loans payday loan directly on to it.
In summary, a prepaid debit card typically offers you flexibility and security but above all, it helps you reduce the risks of accidental over-spending, so you can feel in control of your money.