Prepaid debit cards are convenient without any hidden costs, but they can also be used for evil purposes. Many prepaid cards come with monthly and initial fees that may not really help you build up your credit, but at least there are some advantages to using one.
For starters, prepaid cards do not accumulate balances. You just have to pay the balance off with your card. This means that you don’t have to worry about getting more plastic than you need, and that you are never tempted to go over the limit or apply more than your credit limit at once.
One of the advantages to using prepaid cards is that you can use them in any ATM machine. All major banks have their own ATMs in retail locations and using a prepaid card eliminates the need to carry cash or carry a checkbook. Of course, you still have to be careful to watch your balance as much as possible, since ATM withdrawal fees are very high, as are credit limit and interest charges on your card balance. If you want to use this method with your card, keep an eye on it, but don’t let it control you.
It is important to note that many prepaid debit card services do not have a “soft” reload option. While this can make life easier if you need to reload your card, you should use the debit card only when you need to. Using a “soft” reload option will leave you stuck with whatever balance is on your card, which can be a problem if you happen to run out of money and need to reload your card.
Another advantage to using a prepaid debit card is that it can be very useful for those who have a difficult time getting their hands on the cash. For instance, many people have had trouble paying bills because they forget they are going to charge their cards the following day. The way that these debit cards work is that after you make your purchase, your money is automatically deducted from the card. After the bill has been paid, you can easily go to the merchant and withdraw the cash you used, or roll the money over into another account.
Another great thing about a prepaid card is that it can be used for emergencies. Because they are tied to your bank account, you do not have to worry about having to pull your wallet out and show your card to the cashier when you need to cash something, like a newspaper, or a grocery bill. If you can not cash it out at a retail store, or ATM, simply reload your card and it’s good to go.
One thing to remember about using a prepaid debit card is that they are not always the best way to go. While they can save you money by providing the convenience of no credit checks or ATM transactions, they still have to follow certain guidelines. If you pay off your balance quickly, you may still end up losing money if you don’t have the correct balance. It is important to set up automatic payments to ensure you get your money deposited in your account every time.
Also, while prepaid debit cards can be used to help improve your credit score, you may want to use other methods of rebuilding your credit before using a prepaid debit card. If you pay your bills and pay your balance on time, your credit will remain intact.
This is because if you do not have any outstanding debt on your card, your credit score will continue to rise. By using the card wisely, you can build up your credit score, and thus, your ability to buy things that you can use more easily, such as a home.
Finally, if you are using a prepaid debit card to help repair your credit, it is important to read all of the fine print on the card and learn about the fees that are associated with the account. There may be restrictions, fees, and/or other charges that you do not understand.
So, what are some good reasons to use a prepaid debit card? It really comes down to the situation you are in and how you intend to use your card. Just remember that just because you are using this type of card doesn’t mean you have to give up your traditional banking or credit cards.