Prepaid Debit Cards – The New Cash

Okay, these are crazy, crazy times we’re living in. And a lot of us aren’t sure what’s going to happen tomorrow let alone next month or next year. Everyone, and I do mean everyone, is paying real close attention to their cash. That’s where prepaid debit cards come in – but more on that in a minute.

Credit Cards are so 2000. Sure, it’s better to have credit than to not have credit, but the days of spending tomorrow’s money today (i.e. with credit cards) has come screeching to a halt. We’ve seen the error of our ways. We’ve come to our senses. We all finally realize that it’s better to save up and spend then to leap off the edge of a credit cliff.

For years they’ve been grinding away at us, finding new and more shadowy ways to make money off our backs. Little by little, they’ve eaten away at our savings, our checking accounts, our deposits, and our payments. Even our CD’s and IRA’s have fallen prey to their predatory practices. Don’t believe me? How about an FDIC survey on bank overdraft protection programs then which estimated that 74% of bank service charge income (i.e. all bank fees) comes from NSF or ODP fees. That’s right, nearly 75 cents of every fee dollar your bank makes comes from a penalty charge.

Those penalty charges find their way into your credit card bills too. Banks control all the rules and they have all the power. They don’t really safeguard your money anymore; rather they dictate how you can spend it by manipulating the rules to give them the edge in every transaction. It’s as if we’ve all been playing in a Vegas poker game with a marked deck.

One of the fastest growing segments of the financial services industry is the prepaid debit card segment. That’s because it’s the right tool at the right time and more people are starting to realize it. Prepaid debit cards protect your cash and don’t penalize you in the process. They are simple to buy, simple to load up with money, and every bit as simple to use as credit cards (actually, they’re simpler). Plus, you can use these cash cards in many, many different ways.

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Prepaid cards (aka stored value cards or prepaid cash cards) are full-blown MasterCard and Visa cards that you load up with cash and spend down when you want to. You purchase the individual cards and keep them for as long as you want. They don’t charge interest. They don’t come with a lengthy application. They don’t require a credit check. And they’re good wherever normal MasterCard and Visa cards are accepted.

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We all have special expenses that we need to save up for. There are birthdays, anniversaries, holidays etc. that always force us to stretch our budgets. Or maybe its something like a down payment on a new car, a new motorcycle, or even a house. Whatever it is, prepaid bank debit cards can help.

Loading up a prepaid debit card regularly and just keeping it in a safe place is a great way to sock away some cash. it's still always available in an emergency. And when it comes time to pay for that special expense, the moneys all there.

You can set up automatic deposits (aka direct deposits) to a prepaid debit card from a banking account. Or better still, set up the deposit directly from your paycheck (bypassing the bank altogether). That way your card gets loaded with a set amount at regular intervals just like clockwork and you can probably avoid a reloading fee.

You then use it wherever you’d normally spend your “pin money.” You can use it at fast food places, drug stores, gas stations, anywhere really. And you can keep track of your balance just as you’d do if you had cash in your wallet. You'll be surprised how convenient that becomes.

All famous money guru’s say that we all need to put away anywhere from 3 to 6 month’s worth of our salary for emergencies. That’s pretty hard to do when you’re just worried about making it through to the end of the month. And keeping it in a bank account isn’t the same as it once was – it’s so easy to transfer it out to pay bills or take it out with an ATM card.

But saving for a rainy day is actually a little bit easier if you use a prepaid debit card. Sure, it takes a measure of discipline but everything worthwhile takes some sacrifice. Once you start saving though, you’ll be amazed at how addicting it becomes. Plus, you’re saving it all into a little plastic tool that’s perfect for use in emergencies.

There are other reasons that make prepaid MasterCards and prepaid Visa cards great tools for managing your money. There’s the peace-of-mind factor knowing you don’t have to worry about identity theft ruining your credit. There’s the comfort you get in knowing that with a debit card, you can’t spend your way into more credit debt. There’s also the freedom you have with the card. You can stop using it at any time, stop loading it if you want, and you never have to cancel a single contract, make a single phone call, or worry about a single credit report.

The last thing I’ll mention is that by using a prepaid debit card, you finally get to take back some control of your finances from your bank. No more hidden fees for you, no more surprise monthly finance charges, and no more penalty fees for being a minute late or a penny short. It’s your money, so keep it out of the bank’s hands and spend it where, when, and how you want to. 

So those are some of the reasons that prepaid debit cards are becoming the hot ticket item in a cool economy. They’re the perfect marriage between plastic and cash. I invite you to take a closer look under the hood. See for yourself. I think once you do, you’ll find that they can be useful in your financial life too. Prepaid debit cards are the right tool for the right job.

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