Technology continues to make its mark on a variety of sectors, and finance is no exception. Today, many people do their banking on mobile platforms and rely on fintech apps to manage their finances. People are also increasingly taking advantage of the convenience and security of prepaid cards.
While most people understand the basic premise of prepaid cards—card holders load them with funds and use them like a regular credit card—many individuals don’t realize the variety of card plans available or the wealth of benefits that these cards offer. For example, the opt+ prepaid card has three different plan levels: Direct Deposit, Monthly, and Pay as You Go. Each level is tailored to fit the card holder’s specific spending style, and regardless of which plan they select, customers can use the card’s mobile app to cash checks, pay bills, and transfer money.
One surprising advantage of prepaid cards is that they can help you save money. Read on to find out how.
They keep your money safe.
The genius of a prepaid card is that you get to control how much money is on it. This way, thieves don’t automatically get access to all of your money like they would if they steal a traditional debit card, which is linked to your bank account. PIN-protected cards add another level of security if you lose your card.
By only loading your card with the amount you plan to spend on a daily, weekly, or monthly basis, you can also significantly curtail your ability to overspend. It is not possible to spend more than the amount you have on your card. Therefore, you never have to pay overdraft charges.
Further, because major credit companies such as Visa, American Express, and MasterCard, stand behind most prepaid cards, you can often file a compensation claim with the issuer if you feel cheated or otherwise unsatisfied with a particular purchase.
They maximize your spending power overseas.
People can also save money using prepaid cards when traveling abroad. In addition to enabling you to set a firm limit on your spending, prepaid cards that match the currency of the country you are visiting allow you to avoid paying foreign exchange fees on each purchase you make. If you’re staying in a country that experiences fluctuating exchange rates, you can load up your card at a time when the rates are best for you to squeeze the most out of every dollar in your travel budget.
Prepaid cards are also a smart substitute for travelers’ checks, which many businesses around the world no longer accept and many banks charge fees to cash. Moreover, it is safer to carry a prepaid card than it is to carry cash. You are not as tempting a target, and if you lose your card, the company that issued it will often transfer money to you (depending on the provider), even if you are overseas.
Additionally, you don’t need to physically enter a bank to add more money to your card. Most prepaid cards let you load funds online or over the phone.
They help you teach your kids how to spend wisely.
One of the most helpful ways that prepaid cards can save you money is by giving your kids a safe way to practice managing their own money. Ideally, this will prevent them from coming to you for funds when they find themselves in a bad spot.
When you give your children their allowance in the form of a prepaid card, they quickly learn that a credit or debit card is not a blank check. When they use up the funds on their card, they don’t go into debt or incur overcharge fees like they would with a regular credit or debit card, but they do learn that “plastic isn’t magic.”
There are other ways to give your child experience with plastic; you can add him or her to your credit card account, which means that any mistakes he or she makes will appear as part of your credit history. You can also give your young adult his or her own credit card, which kids can use to get into debt without any parental oversight. However, neither of these choices is a particularly safe option.
Especially for teenagers preparing to go away to college, it’s a good idea to use prepaid cards as a sort of “trial run” for the necessary budgeting and financial planning they will have to do while away from home. Even better, you can track their spending habits online to see if they are using their money wisely. This can open up a whole range of important financial discussions for your family. Because schools today largely ignore financial instruction, most young people are in desperate need of practical information and advice on the subject.
We just sent you an email. Please click the link in the email to confirm your subscription!
OKSubscriptions powered by Strikingly