Over the years, I’ve written quite a bit about the benefits of rewards credit cards. When used wisely and carefully, rewards credit cards are a great way to get paid to buy things that you would buy anyway. However, the trick is using them wisely, and not getting into the bad (and easy) habit of spending more than we would otherwise. After all, what’s a few extra dollars if it’s on the credit card? The bill isn’t due for another month, and besides, we get those rewards.
That’s dangerous thinking.
If you start thinking that way when shopping and using your credit cards, it’s time to consider other options. The Envelope Method is one choice, where cash only is used. But it’s quite inconvenient. Plus, online shopping is out completely, and that’s where the best deals tend to be on a lot of things. So, what’s a frugal person to do?
Consider a prepaid debit card.
With a prepaid debit card, you get (nearly) all the convenience of a credit card, with none of the pitfalls. Think about this:
- Use it like you would a regular credit card – in stores or online
- Accepted anywhere Visa is accepted
- Safer than cash
- No overdraft fees (unlike a traditional debit card)
- Free Direct Deposit
There are a lot of reasons for a person to get a prepaid debit card – especially for those of us who tend to overspend on credit cards. If you’re on the edge, and need just one more reason, take a look at this: the Pink Visa Prepaid Debit Card. It’s a traditional prepaid debit card, with the added bonus that ACE Cash Express will donate a portion of the proceeds of each transaction to the National Breast Cancer Foundation.
Control your spending and help fight breast cancer? There are definitely some positives there. So, is there a downside?
Well, of course there is. There are positives to everything, and prepaid debit cards are no exceptions. Namely, fees. There are fees for purchases ($1 per purchase, unless you go with a monthly plan). ATM withdrawals cost about $2.50 each as well, which isn’t great, but certainly not out of the ordinary. There’s also a fee if you lose your card.
It’s up to you to weight the pros and cons.
Prepaid debit cards aren’t the best choice for everyone. They make sense for some people, and don’t make much sense for other folks. Sit down, look at your spending habits and patterns, and see if the pros outweigh the cons.
