Friday, November 4, 2011

Can Prepaid Debit Cards Help You Maintain Your Budget?

Maintaining a budget is a lot like yo-yo dieting. Think about it--when dieting, a weight cycle can range from small weight losses and big gains. Your budget can also be affected this way when you don't have a plan. One month, you might see big gains, but another month, you suffer huge losses. With the U.S. economy continuing to be sluggish, moms probably find themselves walking out of a grocery store shocked at their receipt and even more shocked when they realize there's not much in their grocery bags. With that said, what is the best way to maintain a budget?

I don't know about you, but I've tried so many ways to maintain a budget from taking out a set amount of money for the month to not taking any money out at all and only relying on credit cards. Somehow, it never seems to work. Now, with banks charging high fees for debit card transactions, U.S. banks are pushing prepaid debit cards. But is it the right thing to maintain your budget? Prepaid debit cards do offer some advantages:

  • You can only spend what is on your card, so there are no costly overdraft or interest fees.
  • It’s an easy-to-use and convenient alternative to credit cards and traditional banking–without all of the worry of going into debt or overdrawing your account.
  • There are no hidden fees or interest charges.
  • You can get instant access to your balance, deposit, and recent transaction information online. Most prepaid cards even allow you to track your transactions on your mobile phone. This is useful to know where and how much you’re spending.
  • Carrying a prepaid debit card is much safer than carrying cash. If it's lost or stolen, the best prepaid debit card companies will protect you against unauthorized purchases.
  • You can also shop online without giving out your credit card information.
If you think a prepaid debit card is for you, you can buy them online or find them in major retailers, but be sure to study the card's policies. Some charge a small monthly fee, fees to reload the card, fees to withdraw money from an ATM, and fees to speak to a customer service representative. However, preloaded cards that offer the convenience of plastic without the risk of taking on further debt can be a great deal and the popularity of prepaid debit cards continues to rise. According to the U.S. Treasury, even the IRS has started a campaign to issue refunds to those who do not have a bank account in the form of a prepaid debit card.

With the holidays around the corner, I see prepaid debit cards as a great alternative for maintaining your budget. Much like that yo-yo diet you've tried time and time again, you've probably realized that if you want to lose weight, you have to do it the right way. Well, it's the same for your budget. If you want to save money, you have to do it the right way and perhaps a prepaid debit card is the way for you.

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