Interesting inquiry, can pre-paid cards assist our Debt Management and as a result prevent us running up more Credit Card Debt? Are they a more viable solution to credit cards? Before we answer these questions let us have a look at just what a pre-paid card is.
Put extremely simply, it’s a card that you can bung any quantity of cash on and use whenever you obtain anything. Once you have used the quantity allocated on the card you can’t exceed it. You can put cash onto it by the use of all the normal methods; ATM, internet, on the telephone or even by process of text messaging. Instead you can go to your local post office or bank and even particular non finance sellers and attain preloaded cards.
A pre-paid card can help us to budget successfully, permitting us to allocate assets for specific purposes; the weekly food allowance, or petrol for instance. Also as David Roger, managing director for the Debt Foundation charity suggests, it can help prevent us erroneously using that overdraft once more and going in to the red.
In theory it should make it better for every single one of us out there who are just a bit too friendly with our credit cards. After all anything that diminishes the risk of running up more Credit Card Debt has to be worth a try hasn’t it?
An extra good feature is that they are not linked back to our bank account. This means if some unkind little character steals our card and tries to feign our identity then they won’t have access to all our precious funds. What’s more if they were to try and use it on the net they would not be able run up exorbitant bills.
But before you get all excited and run out there to obtain one, there are a small number of things to keep in mind. Firstly the most obvious; you can only load it with money that you already have. Seems blatantly clear but it is really easy to not recall that that piece of plastic in your hand is not an limitless supply of credit that we can ignore when the bill comes through. Visualize the embarrassment at the checkout if you attempt to get something that is more than the funds to be had on the card! A fundamental point to bear in mind; only load it with what you can pay for.
Besides there are quite a few costs incurred, monthly charges for example and lots even have inactivity fees.
So, yes another means of Debt Management they might be, but what other possibilities are there, other than not spending what we have not got? For starters we can help our finances by being stricter with ourselves. We will need to limit those impulse buys that we afterward regret, but still have to pay for.
Having a reasonable budget and keeping to it goes a long way towards retaining a fit bank balance and reducing those worry levels.
If we are in debt up to our eyeballs then budgeting is a must. We can look at options such as Debt Consolidation for one, to ensure we never feel so overwhelmed with it all. By placing all those debts into one pot helps us to see what we’re dealing with, not only that but Debt Consolidation will enable us to have one reduced monthly payment.
Anything we opt for the bottom line is, don’t get into more debt than we can manage.
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