Prepaid cards are safer than cash, as convenient as regular credit cards, and can help you control your spending.
You put money onto the MasterCard® or Visa® card itself – “load” the card – usually from your cash, checking or savings account. You can then use the card to make in store, by phone or online purchases. But only the amount you put into it is the amount you’re allowed to spend, which prevents you from spending more than you can afford. You can continue to reload the card with more money as you use it.
Prepaid cards are a great help when you’re trying to stick to a budget, as your expenses deducted from the available amount each time you use the card. Keep your receipts to see where the money went and reload the card next month to limit your spending.
Unlike cash, your card can be replaced if it is lost or stolen, and when you report the loss to the card’s customer service, you won’t be charged if someone else uses the card. You can also use prepaid cards to send money to family and friends out of the country.
Teens and college students can learn how to budget their expenses when they use a prepaid card. Parents can monitor their child’s spending and not have to worry about them building up a large credit card debt.
Although you won’t pay interest or late fees, prepaid cards often do have other charges such as annual and monthly fees, fees per transaction, reloading fees and ATM fees. See what type of cards your bank offers and shop and compare before getting a card.