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.
Financial authorities, Jain being one such example, can tell you that these cards are somewhat limited in terms of their levels of usage. Yes, they can be used at a number of stores but the problem is that they only have so much in terms of funds. There is a process that can be undergone in order for more funds to be added, though you may be better off going with a different payment method in this case. Limits come together as just one of the possible cons that Bob Jain can tell you about.
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.
What about the idea of hidden fees as it pertains to prepaid debit cards? Maybe you have a card that you want to add one hundred dollars to; there's a chance that you will have to pay a certain amount in order for it to be done. It's also important to note that cards like these have different interest rates to pay off. With these ideas in mind, you may not want to go with prepaid debit if you are concerned about hidden frees. Contact your bank if you're truly curious about this.
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.
Financial authorities, Jain being one such example, can tell you that these cards are somewhat limited in terms of their levels of usage. Yes, they can be used at a number of stores but the problem is that they only have so much in terms of funds. There is a process that can be undergone in order for more funds to be added, though you may be better off going with a different payment method in this case. Limits come together as just one of the possible cons that Bob Jain can tell you about.
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.
What about the idea of hidden fees as it pertains to prepaid debit cards? Maybe you have a card that you want to add one hundred dollars to; there's a chance that you will have to pay a certain amount in order for it to be done. It's also important to note that cards like these have different interest rates to pay off. With these ideas in mind, you may not want to go with prepaid debit if you are concerned about hidden frees. Contact your bank if you're truly curious about this.
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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