Do you feel more comfortable spending the money you know you have? If so, a debit or prepaid card might be your best option. When you make purchases, it withdraws funds directly from your account, so you won’t spend more than you have.
Smart Debit Card Practices
1. Always know your current bank account balance and available funds.
2. Know your daily cash withdrawal and spending limits and contact your provider if you need to raise or lower amounts.
3. If you plan on using your debit card outside your local area or abroad, let your bank or provider know ahead of time, to prevent fraud or security alerts.
How Prepaid Cards Work
You may have received a prepaid card before as a gift, a government disbursement, refund, or other payment. Unlike debit cards, prepaid cards are not tied to a bank account. When you make a purchase with a prepaid card, the amount is subtracted from the balance of the card. Here’s what you can do with it:
Make purchases in person, online or by phone
Reload the card with additional funds
Give gifts to friends and family
Withdraw cash from an ATM or bank
Receive wages or funds by direct deposit to the card
Prepaid cards as a financial teaching tool – Prepaid cards can be a great way to help young people gain experience budgeting, using ATMs and making purchases. Because you aren’t given credit, you can’t spend more than you have or overdraw your account. The cards are lower risk and allow
Prepaid cards as an alternative check cashing tool – Many consumers still operate outside the traditional financial system and take their checks to check-cashing stores. This practice can get quite expensive due to the fees, so choosing a prepaid card that offers the ability to have funds directly deposited on account, which you can spend or withdraw at ATMs may save you money in the long run.