You may be asking yourself “What is the difference between a prepaid credit card and a debit card?” Well, the differences mainly lie in how simple your personal accounting will be for the month.
As you probably know, a debit card will link up directly with your bank account and debit funds from your account as needed. A prepaid card is just that, prepaid. You put money into the card as needed and if you run out it’s dead until you add more onto it.
The question you’re probably asking now is “How would the prepaid be more convenient?” The truth is that if you’re even remotely aware of your purchasing habits, you’ll be able to keep a basic idea of how much you have left and you’ll know when you have to add money. A debit card may seem like it takes away a lot of the planning, but do you really want to constantly drain your account? The prepaid card just fits into your budget better. If you know you have X amount of money to spend for the month, then you can add it and not worry as much. You won’t be able to go over your budget and it’ll be very easy to figure out how much you spent. In the rare case that you forget how much is left, you can always just call a number or lookup your account online to get the exact amount left.
Using a prepaid card in this fashion will also be of immense aid to those who are on a tight budget. Compare these two situations. You try to buy a few DVDs with your prepaid card at the local store. You swipe the card and screen reads insufficient funds. You can now dig out a few dollars from your pocket to cover the cost or blush a little and take them back to the shelves. Now, picture it with a debit card. The purchase would go through and everything would be fine, until you have to pay a huge overdraft fee at the end of the month. If you have trouble keeping a close watch on your bank account, then a prepaid card will be a godsend. No more accidental overdrafts or bounced checks. Loading the card up a few times a month will be immensely easier than keeping track of all the debit card purchases and withdrawals that you’d make throughout the day.
If you are incredibly responsible and like a challenge, you can chose to just use a debit card for most of your purchases. Just remember that a prepaid credit card would make your monthly accounting a lot easier while protecting you from some very pricy fees and fines.