Thursday, August 11, 2016

Benefits of Using a Prepaid Debit Card

 VISA Prepaid Debit Card | Southwest Federal Credit Union

Prepaid debit cards are a great tool to use for financial empowerment and effective money management. Prepaid cards are a great way to save money to make purchase (small and large). A principle that your grandparents or great-parents used when credit cards were not available or not as readily available. Many Americans are using reverse budgeting as a way to save for purchases without getting into debt.

To use reverse budgeting you must determine what you want to purchase, the total amount you will need to save and how much money you need to save each month towards your goal. After you have reached your savings goal, you can use the prepaid debit card to pay for an item you desire to purchase. 

Prepaid debit cards are a convenient way to make purchases, they prevent consumers from spending more money than they have and it is easy to add funds. Prepaid debit cards are like an auto brake pedal. They stop you from crashing and going overboard with your spending.

Prepaid debit cards help you stick to a budget or spending plan. This makes you more conscious about your spending. Prepaid debit cards work similar to debit cards for making payments or purchasing items.

Prepaid debit cards are also helpful if you do not want to carry large amounts of cash. Comparison shop and read all the fine print before choosing a prepaid debit card. Prepaid debit cards can be used in multiple ways when spending money.

Great for everyday spending
If you previously overspent, paid bank fees for overdrafts, bounced checks or have difficulty with budgeting your money, a prepaid debit card is a great option for spending money and paying bills. It can also be used as a backup payment method or money source.

Controls spending
Prepaid debit cards help control spending and are an alternative to a cash based lifestyle. Your spending is limited to the amount of money available on your card. Prepaid debit cards help manage cash flow. A prepaid debit card shows your spending habits at any given time or over a period of time either daily, weekly or monthly.

Helps to Create a Budget
Using a prepaid debit card helps you to create a budget by tracking every expense. You can see right away what you are spending you money on by viewing your account online or viewing your monthly statement. A budget will help you categorize your spending and identifies what you earn and what you spend. A budget helps you to reduce spending which is beneficial when trying to save money to make future purchases. 

A budget helps you to become conscious of your spending by paying attention to the cost of an item, quality and materials used. Subtract your total monthly income (net) minus your total monthly expenses. 

Online and In-Store purchases
You can shop online anonymously. This helps reduce identity theft since the card is not directly linked to your bank account. When making purchases do research online to compare prices with at least three companies to find the best deal. Compare prices in-store versus purchasing online. Look online for coupons or discount codes.

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