4 ways to save money using a prepaid debit card
Published Fri, Jun 3, 2011 Updated Tue, Feb 16, 2021
Are prepaid debit cards the best choice for everyone? No. Can you rack up extortionate fees? Absolutely. Then why would anyone use a prepaid debit card? That is a great question with many answers.
One of the most prevalent answers is that there are many people with very poor credit who don’t qualify for a huge range of financial products. Some parents are giving prepaid cards to their children to teach money management and monitor their expenditures. But what keeps many people up at night is the negative information about prepaid card fees.
Again, it’s possible to incur a hefty fees on a prepaid card as with any type of financial account. You should always use any financial tool prudently, be it credit card, debit card, personal loan or payday loan, Now, don’t get me wrong, there is nothing wrong with fees, per se. Institutions providing certain services are bound to charge fees, or they wouldn’t stay in business. But prepaid cards, just like any other account have certain financial advantages. Here are six ways to save money using a prepaid debit card:
Since prepaid cards aren’t loaded with credit, there is no balance carried over and therefore, no interest charged. This is earned money you load onto your card. No danger in looking at a statement a year from now and seeing hundreds of pounds in fees.
Unlike credit cards, some prepaid cards, just like bank debit cards, let you withdraw cash from a cash machine for free. Choose a prepaid debit card with a cash machine facility network and save money on big fees.
No overdraft fees
Once again, you have already loaded “earned” money on your prepaid card. When the card reaches a zero balance, you will no longer be able to use it. Load more money onto the card to use it again. Be careful, as some prepaid cards will charge an unplanned overdraft fee if you somehow end up charging more on the card than you have available. Always read the terms and conditions of your prepaid card.
This is perhaps the best way to save a lot of money as most prepaid card companies waive their monthly fee (or give some other incentive) when a cardholder uses direct deposit. At the prepaid card’s website, you can print out a direct deposit form to fill out for your employer. Funds from your payday will be automatically loaded on your card at the end of the pay period. You should be able to check your balance online at the card’s website. High retail check cashing fees can also be saved by using direct deposit.
There are many people out there that do not know they have more choices available to them (like prepaid debit cards) when it comes to paying bills. Prepaid debit cards aren’t the best solution for everyone, but if used properly, they can save many cardholders from wasting their hard-earned money.
Tracy Jones is a content contributor for GetDebit.com, which provides information about prepaid products, including the AccountNow Visa prepaid debit card.