Interesting query, can pre pay cards aid our Debt Management and therefore prevent us running up added Credit Card Debt? Are they a more viable solution to credit cards? Before we reply to these questions let us take a look at precisely what a pre pay card is.
Put extremely simply, it’s a card that you can bung any amount of cash on and use whenever you acquire anything. Once you’ve used the amount allocated on the card you can’t exceed it. You can put cash onto it through all the normal methods; ATM, online, on the phone or even by way of text messaging. Then again you can go to your regional post office or bank and even several non finance merchants and attain preloaded cards.
A pre pay card can help us to budget efficiently, permitting us to allocate income for specific purposes; the weekly food allowance, or petrol for example. Also as David Roger, managing director for the Debt Foundation charity suggests, it can help prevent us wrongly using that overdraft once more and going in to the red.
In theory it should make it simplier and easier 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 added Credit Card Debt has to be worth a try hasn’t it?
A further good point is that they’re not linked back to our bank account. This means if a particular cruel little character steals our card and tries to feign our identity then they will not have access to all our precious resources. In addition if they were to try and use it on the internet they wouldn’t be able run up expensive bills.
But before you get all excited and dash out there to find one, there are some things to bear in mind. Firstly the most obvious; you can only load it with income that you already have. Appears blatantly obvious but it is very easy to disregard that that piece of plastic in your hand is not an infinite fund of credit that we can discount when the invoice comes through. Visualize the embarrassment at the checkout if you attempt to procure something that is more than the cash existing on the card! A vital item to memorize; only load it with what you can come up with the money for.
Also there are lots of charges incurred, monthly fees for example and a few even have inactivity payments.
So, yes a different means of Debt Management they might be, but what other options are there, other than not spending what we haven’t got? For starters we may help our finances by being stricter with ourselves. We really should try to rein in those impulse buys that we later regret, but still need to pay for.
Having a practical budget and keeping to it goes a great distance towards sustaining a healthy 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, so we need not feel so overwhelmed with it all. By placing all those debts into one pot assists 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 select the bottom line is, never get into more debt than we can handle.
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