Using Prepaid Debit Cards to Help Control Your Spending

In the current difficult economic climate, it has become more important than ever to keep a close track on spending. While credit cards are a convenient option, they often make it seem like we have more money than we do, and in the long run can cause more problems than they solve as interest charges mount up.

One solution is to pay for everything with cash, but that can be inconvenient, and it isn't always a good idea to carry large quantities of cash on shopping trips. Checks or debit cards help limit spending, but also carry the risk of overdraft fees. With banks fighting for every penny of profit they can manage, many have increased overdraft fees, hoping to profit off or your overspending. With a debit card in particular, it is all too easy to forget to subtract purchases from the checking account, or to overestimate available funds.

A relatively easy way to avoid all of these issues is to use a prepaid debit card. These cards work just like a credit card, and are accepted in nearly all retail outlets. Rather than drawing funds directly from a checking account, as most traditional debit cards do, the prepaid debit card is funded ahead of time with a certain amount of money. So if you want to spend no more than two hundred dollars on holiday shopping, for example, fund the card with that amount of money. When the limit is reached, the card is no longer usable, that is, until more funds are added to.

Prepaid cards are also popular options for teens, providing a young adult with the experience of budgeting along with the independence to spend money without checking with mom or dad. Parents maintain control though, by limiting the amount of money for which the card is funded.

A prepaid debit card helps you stay within your chosen budget, and eliminates the danger of overdraft fees or high interest rates charged to a credit card. With a prepaid debit card, you can have the ease and convenience of a credit card or regular debit card without risk of overspending.