We have all been taught to live only within our means. In today’s society which features lavish lifestyles and shopping sprees, most people find it hard to manage their finances well that they even go way beyond their specified budgets so that they could enjoy the best things in life.

Eventually these individuals find it hard to resist using their credit cards to finance their online purchases, and travel charges. Soon, they accumulate so much debt that will prove to be very difficult to settle.

So if you believe in the premise that you need to control and discipline yourself to stick only with whatever finances you have, but still you would like to keep a handy plastic card; then, you might as well apply for prepaid debit cards. What are these cards for? The answer is provided below.

Prepaid debit cards are excellent tools to give people the flexibility to make purchases without the threat of accumulating large debts. The reason behind this is that this debit card requires a fund to be ‘loaded’ or transferred to it, before a cardholder could use it for making purchases or settling monthly bills.

These reloadable prepaid cards function in the same manner as prepaid mobile services; you only get to enjoy sending messages and calling up your friends as long as there is available credit on your mobile phone. By using these debit cards, people will surely live and stick to the budget they have set, without encountering any credit entanglements.

Another good thing about most prepaid debit cards is that they do not charge interest rates on purchases. (some debit cards DO charge fees on declined transactions)

A lot of other cards today impose a large number of fees to their clients, especially when their clients encounter declined purchases. But for these reloadable prepaid cards, cardholders need not worry about additional interest rates and late penalty charges.

Other features of prepaid debit cards include, relatively easy approval of card application, and online monitoring of the expenses and purchases charged on the debit card. These features prove to be helpful in convincing more people to get their own prepaid debit cards so that they could also reap the benefits that these cards could offer.

So, apply now for these debit cards and soon you will realize the value of living only within your means.

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!

One great attraction about prepaid debit cards is that you don’t have to worry about interest rates. Since you are not given a credit line and you pay for your bills using the available cash you deposited, you will not incur additional APR costs.

Nevertheless, owners of debit cards must be cautious about the possible penalty fees associated with their prepaid card use. What you thought was a $50 worth of purchase may suddenly cost you $80 or more due to the extra costs. What are these penalty charges?

Below is a list of debit card fees to watch out for:

Negative Balance Penalty. You can only use your debit card for payment as long as you have an available balance in your account. However, there are instances when your bill may exceed just a little over your available balance. In this case, your transaction may still be accepted but you will be charged with a penalty fee.

Decline Charge. Again, prepaid debit card holders are not allowed to overdraw. Hence, if you try to make a purchase that is way too large than your available balance, your transaction will usually be declined and you will be penalized for trying.

Daily Limit Penalty. Some prepaid debit card issuers impose a limit to the amount of transaction you can make each day. Going beyond that could mean additional penalty fees.

Inactivity Fee. Not using your debit card within a specified time period may also cost you additional charges.

Customer Service Charge. Some Issuers may not provide assistance for free. Other may provide one free live customer call each month but may charge a fee for corresponding calls (may range from $0.50-$2.00 per call) So before calling your debit card’s hotline number, check how much you will be charged.

Account Termination Penalty. Are you planning to close your account? If yes, your debit card Issuer may penalize you for terminating their service ($15 or more).

Card replacement. If you lose your debit card, there is usually a fee to ask for a replacement card. Visa and MasterCard may charge you $10 for this.

ATM Balance Inquiry. Do you want to inquire your balance? Watch out! Checking from your nearest ATM may cost you anywhere from $0.50 to $1.00, depending on your debit card type.

Currency Conversion. Currency conversion rates are not just applicable to regular credit cards but to prepaid debit cards as well. Hence, before using your prepaid card abroad, check the currency conversion rate. For instance, Visa Prepaid Debit Card charges 2% while MasterCard Debit Card charges 2.95% currency conversion rate from the total amount of purchase.

Choose and Use Your Debit Card Wisely

Just as it is important to check the fine print before signing for a credit card, you also need to do some investigation when choosing a debit card. More importantly, you need to familiarize yourself with your privileges and limitations to avoid spending more on penalty and maintenance debit card fees. Even though it is far easier to get a debit card, take the extra effort to read the Terms and Conditions.

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!

A lot of parents are hesitant about handing credit cards to their teenagers due to the risk of bad debt.  Surveys prove that teenagers are more prone to overspending especially since most of them do not pay for their own charges.

In this article, let’s discuss how prepaid debit cards can be the perfect tool for teaching young people how to handle credit without falling in the trap of uncontrolled debt.

Prepaid Cards – How They Work

A prepaid card can be used for purchases from a regular store or an online store much like a traditional credit card.  It is cashless form of payment.  However, instead of paying for your balance at a later time, a prepaid cardholder must first deposit cash in his/her account before charging expenses to the card.  In short, you can’t use your prepaid card if you don’t have existing funds.

Prepaid debit cards can also be used for sending and receiving cash to people from afar.  Instead of paying a wire money transfer service, you can send money to your family members using your debit account.  Once sent, the recipient can withdraw the money from a nearest ATM.

Both Visa (Visa Buxx) and MasterCard (Allowcard ) have created their own versions of prepaid debit cards especially for teens.  Unlike credit cards, prepaid debit cards do not have interest rates, overdraft fees or late penalty charges.

Teach Your Teens About Credit Management

If you are a parent, here are practical tips on how you can train your teenagers on how to manage credit responsibly:

Limit their credit usage. Deposit only a limited amount of cash in your teenager’s debit card.  They should know that once their available balance is spent, they will need to work their own budget.

Let them earn it. Parents can set house chores or tasks for their kids to help them understand about the value of work and money.

Keep track of their spending. Parents can easily monitor their teen’s spending habits by simply logging in to the account.  Most debit card issuers provide an online account access for easy checking.

Involve your teens. When choosing a prepaid debit card, get your kids involved.  In comparing different debit cards in the market, study possible choices with your child.  Read the fine print or the Terms and Conditions together.  This way, your teen will be aware about the costs in maintaining the debit card as well as its limitations.

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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!

Today, more and more people recognize the benefits of owning prepaid debit cards.  Although it does not provide the cardholder a credit line, that same limitation can actually be an advantage for people who want to stay away from bad debt.  Let’s discuss the benefits of owning a prepaid debit card.

Who Needs A Prepaid Card?

Parents who want to provide credit cards to their college kids but may be hesitant to do so for fear of the risk of bad debt.  With a prepaid card, that risk is eliminated.  Parents can choose to limit the amount of cash deposit in their teen’s account so they will be able to stick with a budget.  Once the balance in the account runs out, the cardholder cannot make anymore charges to the card.

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Prepaid debit cards are also practical tools for frequent travellers.  It is a great way to shop without cash.  These cards carry the Visa or the MasterCard logo and are a recognized mode of payment in many establishments worldwide.  For online shoppers, a prepaid card is a safer way to shop since you don’t have to reveal your credit card information or bank details.

Advantages of Using Prepaid Cards

What are advantageous of using a prepaid card?  Consider these:

Convenience. Prepaid cards provide the same convenience as credit cards.  You can take your card with you and make purchases without cash.

Cost efficient. Unlike credit cards, there are no interest rates, late penalty charges or over-the-limit costs.

Safe and quicker money transfers. Prepaid cards can be used for quicker and safer money transfers.  If you have a teenager who’s staying in a boarding school, you can send money to your child any time using a debit card.

Control your spending. Prepaid cards cannot be used for advanced purchases.  This reduces the risk of buying on an impulse or spending more than what you can afford.  If you don’t have a balance in your account, you will have more time to consider whether or not you really need to make the purchase.

Build or rebuild your credit history. The great improvement with debit cards is that they can now be used to build credit history or improve a low credit score.  Find an issuer that will report your payments to the three major credit bureaus (Experian, Equifax, TransUnion) and you should be able to improve your credit standing one step at a time.

Costs of a Prepaid Card

Prepaid cards do not charge you with interest rate, over-the-limit costs or late penalty charges, but you need to be aware about the fees before choosing one.  Take note that you will be charged a transaction fee each time you use your debit card for payment.  There is also an annual fee to keep your account active.

Just as it is important to read the fine print when choosing a regular credit card, the same step is important in choosing a prepaid debit card as well.

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!

It doesn’t really matter if you already own a credit card or not. Having a debit card in your wallet can come in handy at any time. What benefits can you expect from a prepaid debit card? Here are 8 benefits to think about:

1. You can set your own spending limit. With a credit card, it can be a little difficult to control spending because you have the option to purchase in advance and pay at a later date. With a debit card, that’s just not possible. If you want to limit your spending, deposit only the amount you plan to spend for the entire month. This way, you can be more in control of your budget.

2. Safer for travels and shopping around. Why carry a large amount of cash in your wallet when you can bring a prepaid debit card instead? Just like credit cards, debit cards offer protection against lost. In case your card gets stolen, you can call your issuer to have your account blocked against unauthorized transactions. Your debit card will be replaced with a brand new card number.

3. Avoid bad debt. Debit transactions are automatically paid the moment the purchase was made. If you don’t have an existing balance in your debit account, you will not be able to make any purchase. Thus, it eliminates the risk of bad debt.

4. No credit check. You don’t need to have a perfect credit history to get a prepaid debit card. Just like department store cards and gas station cards, credit check is not a requirement. Even with no credit or poor credit, you can easily get one.

5. No monthly bills. No bills will come your way, no payment due dates, no late penalty charges, and no interest rates. Imagine how stressful it must be to be worrying about all these.

6. Withdraw cash from any ATM at any time. Prepaid debit cards are also great during times of emergencies when you need to cash. For parents who need to send money to their college kids on a regular basis, a debit card is the faster, safer, more convenient and cheaper way to do that.

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7. Can be used locally and internationally. If you travel to different countries, choose a prepaid debit card with a Visa or MasterCard logo. This way, you can be sure that your card will be accepted at leading merchants worldwide.

8. Build credit history. The newest prepaid debit cards in the market today offer credit reporting to the major credit bureaus (Experian, Equifax, TransUnion). Those who want to establish credit or rebuild bad credit can get a debit card without worrying about getting rejected.

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!

Many people do not want to get a prepaid debit card until they need one. When stuck in bad credit, you will not be able to get approved for credit cards that require a good credit score. In this case, applying for a debit card gives you a guaranteed approval.

Prepaid Debit Cards for Rebuilding Bad Credit

It is good to know that prepaid debit card issuers today now provide credit reporting to the major bureaus.  This means people who need to rebuild their credit history can now use a debit card to do so.  However, prepaid debit cards are not just for people with bad credit.  Below are other benefits of using prepaid debit cards.

Avoid interest rate charges. When you use your debit card for payment, your bills will automatically be deducted from your cash deposit.  Since a debit card payment is as good as cash payment, you will not be charged with any interest rate.

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Avoid late penalty fees. Submit your credit card payment even just a day after your due date and you will incur late penalty charges.  With a debit card, you can completely forget about late fees.

Limit your spending. Credit card holders often fall in the debt trap because of maximizing their credit limit or falling behind on their payments.  Because of its limitation, using a prepaid debit card can help you exercise more control over your spending.

Send or Receive money conveniently and cost-effectively. Do you need to send money to your kids?  DO you have employees that you need to send payment to regularly?  If yes, then using a prepaid debit card is an easier and more cost-effective way to transfer money.

Sending money through Wire Money Transfer services mean paying for a service charge per transaction.  With a debit card, transferring money is free as long as your recipient uses a debit card from the same issuer.  Furthermore, your recipient can withdraw the money only a few seconds or minutes after the transfer was done.

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!

As the number of cardholders who default on their payments increases, credit card companies have come up with ways on how to service the bad credit market.  How?  By offering secured credit cards and prepaid debit cards to people with bad credit history.

What Are Prepaid Debit Cards?

A prepaid debit card is a mode of payment which can be acquired by people with bad credit.  If you can’t get a regular credit card that requires good or excellent credit history, then a debit card is made for you.

You can use a debit card just like a credit card.  However, you must first submit a cash deposit to your account before using it for payment.  The amount of deposit you have in your account also determines how much you can charge to your debit card.  Once you have reached zero balance, you must make a new cash deposit to your account.  What are the pros and cons of a prepaid debit card?

The Pros of Using A Prepaid Debit Cards

Cashless shopping. Instead of bringing along a significant amount of cash when buying your groceries or strolling at malls, you can simply bring your prepaid debit card for safety and ease.

Convenient for travels. Travelers can also enjoy the convenience of using a prepaid debit card instead of paying with cash or checks.  Prepaid debit cards with Mastercard, American Express and Visa logos are accepted wherever credit card payment is available so you can take it anywhere you go.

No need to worry about repayment. Once you charge a bill to your debit card, it will be instantly paid off using the money you deposited.  With a prepaid card, you don’t have to think about payment due dates, interest rates or late penalty charges.

Anyone can get a debit card. Applying for a prepaid card is so easy and you are automatically granted an approval regardless of your credit history.

Avoid the risk of bad debt. With a prepaid card, unplanned purchases can be avoided since you can’t use it if you don’t have existing funds in your account.

The Cons of Using A Prepaid Debit Cards

Per Transaction Fees. Prepaid debit cardholders must remember that there is an additional fee for every transaction.  To cut back on costs, plan your purchases ahead of time so you can pay for all your purchases at once.

No credit line. Some people dislike prepaid debit cards because they can’t borrow against their credit.  However, if you take a look at the advantages, you will see that owning a prepaid debit card is worth it.

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!