How To Use Debit Cards Wisely


Prepaid debit cards are being used more and more as tools to help people improve their credit and create budgets that can help them to get out of debt and save some money.

That’s a lot for one card to do, but if you purchase the right kind of debit card and use it wisely, you can accomplish all of that!

What are Prepaid Debit Cards

Prepaid debit cards were once thought of as cards only used by people with bad credit.  Since they are usually offered to people with bad credit, these cards are also known as bad credit credit cards.  Over the years more and more people have come to see the true value in having a prepaid debit card. 

Prepaid Debit Cards – Great For College Students!

In my own family, my nephew has gone off to college.  We were a bit surprised at how quickly he went thru his allowance.  My sister asked for help and we got him a prepaid debit card.  Instead of giving him a full months allowance all at once (it seemed to be burning a hole in his pocket!)  We gave him 1/2 at the beginning of the month and 1/2 on the 15th.  It took some tough love and 3 months of running out of money within a week, but he learned to manage his money!

Basic Requirements To Obtain A Prepaid Card

Still there are basic requirements for this program. An applicant should be at least 18 years old and with a stable source of income. In the case of my nephew, the applicant of course was my sister.  Although a college student with a job could apply on their own. The applicant should also provide some identification papers and a filled out application form. After filing these documents, the individual can instantly get approved for the card. He would just need to wait for the card to arrive via mail.

How Prepaid Debit Cards Function

These “bad credit credit cards” actually function like standard credit cards. A person can use his prepaid debit card to make hotel reservations, shop online, book flights and even rent cars! A card holder can also use his card wherever credit cards are accepted. He can use it to make purchases and even to pay monthly bills.

However, before you can use a prepaid debit card, you have to load money onto it first. The money you load on your card, will serve as your credit limit. But what if you go beyond your credit limit? If this happens, you can no longer use the card. Your future transactions using the card will be declined until you are able to re-load cash onto your card again.

How To Use Debit Cards Wisely

  • Always check your account balances. Before using your debit card, check your account and make sure that you have available funds.  This will allow you to enjoy the continuous usage of your prepaid debit card. This will also help you avoid paying declined transaction penalties.
  • Allow the card to teach you basic budgeting. The premise of using a prepaid card is to teach you to spend only within your means. Avoid loading a large sum of cash in your debit account as it can tempt you to spend on unnecessary items.

    Instead, consider your monthly budget before deciding how much you can load onto your prepaid debit card. You may decide to use your card to pay for your groceries and bills. So you might as well put the funds allocated for these expenses onto your debit card. This way you can learn how you should manage your finances and card the right way.

  • Credit Builder Program. If you need to rebuild your credit make sure your card has the option of reporting to the credit bureaus. Not all of these types of cards will have a credit builder program. So if your goal is to improve your credit score, then read the benefits of the card carefully. Some of these programs also charge to report to the credit bureaus.

We hope that this short overview about prepaid debit cards allowed you to appreciate what these cards can do. We also hope that the three tips we have listed above can help you see ways by which you can manage a prepaid debit card wisely.

About the Author

Tara Tiemann is a credit analyst for Go-prepaid.com which has been a resource site for people who want to live debt free. If you are on a budget using prepaid debit cards,prepaid credit cards and prepaid cell phone service can save you big money!


About Liz Roberts

Liz Roberts is the new credit specialist for Go-Prepaid. If you are on a budget, we can get you discounted cell phone service from Sprint, Verizon and T-Mobile! NO CREDIT CHECK ! Using a prepaid services can save you a TON of money! Follow our blog to find out how!

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