Prepaid debit cards offer the ease of a credit card without the drawbacks of a credit card. Also, they are a simple and effective way to budget finances during this recession. However, it is important to know the pros and cons of using a prepaid debit card before using one.
Pros of Using a Prepaid Debit Card
There are plenty advantages to using prepaid debit cards:
Work just like a debit card
Prepaid debit cards are accepted anywhere Visa or Mastercard are accepted. You can use these to make online purchases, pay for dinner at a restaurant, or shop at the mall.
Easy to load
With features like Direct Deposit, online services as well as in-store services, prepaid debit cards are easy to load with cash. Just bring a check or cash to load the debit card; it is easy as that.
Stay within your limit
With a prepaid debit card, you will not spend more than you have. Unlike checking accounts, prepaid debit cards will not allow you to go over the amount on the card, which also means, no over draft fees.
Cons of Using a Prepaid Debit Card
Not everything can be perfect, and prepaid debit cards do have drawbacks:
There are usually fees for depositing money onto a prepaid debit card and for the initial set up. Check with the prepaid debit card provider to for a full schedule and definite of fees.
Won’t improve your credit
Prepaid debit cards will not make a difference to your credit score. Also, a prepaid debit card provider should not ask for your social security number either. You should only go through a brand that you trust.
Must stay within your limit
A prepaid debit card will not allow you to pull from an checking account, savings account or credit card if you make a purchase over your limit. Your debit card will be declined unless the purchase is for the exact amount or less than your balance on the card.
Consider these pros and cons when it comes to making a choice about a prepaid debit card.
Do you have any experience using prepaid gift cards?
This is a guest post from ACE Express. If you have any questions about prepaid debit cards you can check their FAQ.