Should You Consider Using a Prepaid Card

Photo by Pickawood on Unsplash

Take a moment to consider this.

The average American has approximately $5,000 in credit card debt. This, in addition to personal loans, student loans, and mortgage debt. 

But if your focus is consumer debt, most of that emanates from discretionary spending. For that reason, many are considering prepaid cards to get their spending under control and prevent taking on additional debt.

Prepaid cards can be an alternative to carrying cash. During the pandemic, some retailers and food outlets stopped accepting cash, which is why a prepaid card is ideal. But, they have far more utility than cash too. They are protected by the Electronic Fund Transfer Act, which means the issuer has to investigate and reimburse unauthorized charges. The card also doesn’t have overdraft charges since you can only ever spend the balance on the card. 

However, a prepaid card isn’t always better than a debit card since you can become overwhelmed with fees. The point of using a prepaid card is to help stay on budget and curb futile spending while allowing your money to stretch. If the card you’re using has fees for everyday transactions, it can impact your spending power.

Another downside of using a prepaid card is your positive transaction history won’t be reported to credit bureaus. 

That shouldn’t be too concerning if the card’s purpose is to avoid the overspending that comes with having a balance on your credit card.

Total
0
Shares
Leave a Reply

Your email address will not be published. Required fields are marked *

Previous Article

Pfizer Plans to Acquire Arena Pharmaceuticals

Next Article

The Fed Admits That Inflation is No Longer “Transitory”

Related Posts