Are Prepaid Debit Cards Worth it? Pros and Cons of Using Prepaid Debit Cards

Are Prepaid Debit Cards Worth it? Pros and Cons of Using Prepaid Debit Cards

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:

Fees involved

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.

4 Responses to Are Prepaid Debit Cards Worth it? Pros and Cons of Using Prepaid Debit Cards

  1. One thing I really like about the American Express gift cards is that they recently got rid of monthly fees for at least the first 12 months which is nice.

    • Depending on the fees associated with Prepaid debit cards I couldn’t think of a better way to handle a kid’s allowance!

      You can even look up what they spend on it.

  2. I agree with Evan Prepaid Debit Cards are a great way to give kids their allowance. You can use it to help teach them to be responsible with their money and view their spending online. These cards are perfect for uses like this or anyone trying to keep a budget.

  3. @Evan true, prepaid cards are a good way to manage your budget and also to control spends of your kids.
    Prepaid card train them on how to use a credit or debit card which is good for their future

Leave a reply

+ 4 = 12