For the sake of keeping your budget intact, it would be understandable why you'd want to go with prepaid debit cards. After all, they are pretty convenient to carry around and they can be used at a number of stores with little to no trouble at all. With that said, there are a few precautions to consider, even if you are entirely sold on the idea. Here are 3 of said precautions, supported by Bob Jain, in order to make your life that much easier.
According to financial names the likes of Jain, it is important to note that these cards have their limits to keep in mind. Many stores will be able to accept them, yes, but the problem is that you are limited to the amount of money loaded on the card to begin with. Adding more money can be done through a process but, at that point, it's easier to just go with a standard debit card. Bob Jain can tell you that this particular option may be a bit more restrictive than you would like.
One of the other negatives of prepaid debit options is that you cannot build a credit history with them. Yes, these may be cards but they serve as nothing more than housing for your funds, not unlike a typical debit cards. You won't be able to amass a strong credit card score, which is one of the many financial features that people tend to overlook from time to time. If you would like to use this option for the purpose of credit-building, you are probably better off looking elsewhere.
Prepaid debit cards, depending on the specific cards utilized, may also have hidden fees to take into consideration. This is true whether it comes to adding extra money onto cards or the possibly hidden interest rates attached to the cards in question. It's in your best interest to stay in touch with your bank, inquiring as much as possible on the matter. Otherwise, you may not want to go with this option if you are looking to minimize the amount of added fees on your end.
With this level of discussion done, it is clear that there are reasons as to why prepaid debit cards are utilized. They can prove to be some of the best money-saving tools and I believe that, if handled correctly, they can teach kids about the importance of saving money in the long term. Of course, these are a couple of pros that go with the cons. Both of these should be considered with prepaid debit options, since they will be preferred by some people more than others.
According to financial names the likes of Jain, it is important to note that these cards have their limits to keep in mind. Many stores will be able to accept them, yes, but the problem is that you are limited to the amount of money loaded on the card to begin with. Adding more money can be done through a process but, at that point, it's easier to just go with a standard debit card. Bob Jain can tell you that this particular option may be a bit more restrictive than you would like.
One of the other negatives of prepaid debit options is that you cannot build a credit history with them. Yes, these may be cards but they serve as nothing more than housing for your funds, not unlike a typical debit cards. You won't be able to amass a strong credit card score, which is one of the many financial features that people tend to overlook from time to time. If you would like to use this option for the purpose of credit-building, you are probably better off looking elsewhere.
Prepaid debit cards, depending on the specific cards utilized, may also have hidden fees to take into consideration. This is true whether it comes to adding extra money onto cards or the possibly hidden interest rates attached to the cards in question. It's in your best interest to stay in touch with your bank, inquiring as much as possible on the matter. Otherwise, you may not want to go with this option if you are looking to minimize the amount of added fees on your end.
With this level of discussion done, it is clear that there are reasons as to why prepaid debit cards are utilized. They can prove to be some of the best money-saving tools and I believe that, if handled correctly, they can teach kids about the importance of saving money in the long term. Of course, these are a couple of pros that go with the cons. Both of these should be considered with prepaid debit options, since they will be preferred by some people more than others.
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