You may be wondering how a prepaid debit card, which is something that helps you spend, may also be able to help you budget.
The answer is simple enough.
A prepaid card can be used like most other types of plastic to pay for things – either in traditional outlets, shops, on the phone or the internet.
However, it only allows you to spend what you have previously decided to load onto the card, so you have already fixed your own budget.
You can typically use it wherever you see the card brand logo (eg prepaid MasterCard etc) displayed and this type of transaction is typically protected by the use of a PIN.
With a prepaid card though, you can only spend what is on the card so there is no chance that you can unknowingly run up an overdraft.
With a traditional debit card on the other hand, in some circumstances your bank may allow your account to go overdrawn. They may also charge you a fee for that privilege.
No credit check application
There are a number of prepaid debit card providers on the internet.
The application process tends to be fairly straightforward and because with one of these cards you can only spend your own money and can’t run up any debt, there’s typically no credit check involved.
This means that it could be useful for people who have a history of poor credit and who are unable to get a bank account and / or credit card.
Flexible e-bank
Some providers of prepaid cards can also arrange for you to have the additional benefit of having an e-bank account.
This could give you facilities to set up regular standing order payments, for example, or have your salary paid directly in.
This could be a major step in getting back to normality if you have had credit problems in the past and perhaps finding it difficult to function in today’s modern world without these types of facilities.
Something worth thinking about!
Helping hand
If you feel that you may need a little help in resisting the temptation to spend, then a prepaid debit card may help you better manage your budget while still leaving you with the flexibility of being able to use a card.
