A reloadable debit card can be pretty handy. Of course you need to understand how to use it properly to get the most out of it. This isn’t your usual credit card as it doesn’t use credit in any way, shape, or form. It uses cash and that cash needs to be loaded first onto the card before you can use it. That makes a prepaid debit card a much better tool for budgeting than a credit card because you can only spend what you load.
Although these debit cards are not free, their charges compare quite favorably with what you would be paying by way of interest rates and fees on your credit cards. Prepaid cards will have fees for reloading, monthly maintenance, ATM usage and, depending on the prepaid card company, other assorted services. But you can usually minimize these fees with a little bit of clever usage.
For instance, reloading fees can be easily handled. These fees normally run in a range between three and six dollars, but many prepaid companies are willing to waive these fees entirely if you agree to set up a direct deposit to the card. That in itself is pretty easy to do plus you can always cancel it or modify it if you change your mind about the card. Simply decide on the amount you’ll need every month and set up the automatic deposit. From that point on your card gets loaded automatically and you say goodbye to reload fees.
Another fee you can avoid for the most part is the ATM fee. Every prepaid card is aligned with one or more ATM networks and, if you only use ATMs within that network, your prepaid card company will likely not charge you for withdrawals or balance inquiries. A little bit of research is all you need to discover which ATMs will work for you.
Monthly maintenance fees can also be avoided in some cases. These are the fees the prepaid company charges you every month to keep your account open and accessible. It’s one of their major money-makers but they’ll waive it in certain cases if you’re a regular user of their card. That usually means making purchases a certain number of times each month or loading a certain amount of money to the card every month via automatic deposit. When you satisfy those requirements, the fee goes away. These offers can change so you need to periodically check the company’s website to make sure you’re doing the right thing.
Since you can eliminate some of the fees connected with a reloadable debit card it becomes an even more attractive spending option when compared to your credit cards. Also, using a pay-as-you-go card like this forces you to spend more wisely and conversely, you save more in the long run. Pick one up today and see for yourself.