Prepaid cards provide consumers with access to a line of credit without the financial risk of traditional credit cards. Prepaid card vendors require cardholders to deposit money in a non-interest-bearing collateral account that operates as a hedge against default. People with bad credit or those that are just starting to build their credit can gain the most from using prepaid credit cards, but anyone can use them to keep their spending and debt in check. Prepaid Visa cards come with the ability to set up recurring charges, which provide their advantages.
More Economical than Banks
In most cases, the fees associated with prepaid cards can often be cheaper than the maintenance costs related to setting up a checking account. Typically, the average prepaid card holder will spend much less in fees each month compared to traditional bank account users. The money saved from paying fewer maintenance fees can be accumulated to a sizeable amount of time which then can be used for more practical purposes such as shopping and dining.
Bills Are Paid In Time
Recurring costs for bill payments provide you with a hands-off process of guaranteeing that your bills are paid on time monthly. Automatic payments not only assists you in avoiding late fees and service interruptions, but they also aid you in sticking to your budget by taking the funds out of your reach before it begins to burn a hole in your pocket or before impulsive spending wipes out your finances. If your prepaid card includes rewards, such as airline miles, serviced office credits or cash return, the recurring payments are included in your reward point totals.
Prepaid Cards Can Aid Your Budget
If you’ve used conventional credit cards in the past, you might have ended up spending more than you originally wanted, simply because the credit was available. Even shopping with cash can have the same risk especially if you have a lot on hand.
It can be easier to follow a budget with a prepaid Visa card. For instance, if you have an idea for how much you want to spend on a purchase, or if you have a set shopping budget each month, you can load that exact amount onto your prepaid card. This will help curb extraneous spending because you will only be able to use the amount preloaded on your card. This is an incredibly useful aspect if you are supporting someone else financially; you can make sure that don’t overspend and stay within the agreed upon budget.
Evade Payment Service Fees
By utilizing your prepaid credit card for recurring payments, you can mostly avoid the fees some businesses charge clients to pay their bills online, or over the phone by credit or debit card. Many businesses will ignore these fees for people who set up automatic payments, to reward customers who provide them practically guaranteed payment. Although debt service charges are usually a very minimal amount, these savings can add up over time.
Credit and debit cards come with the inherent possibility of fraud. Aside from someone stealing your card while you’re out and about, there is also the risk of data hacks and security breaches when shopping online. If you use a debit card (a card directly linked to your bank account), and your information falls into the wrong hands, the financial loss may not only be inconvenient, and it could be devastating. Not to mention the risks of identity theft and the subsequently ruined credit score that can happen with a stolen credit card. If you’re planning to shop online or at a brick and mortar store, directly load a set amount onto your prepaid card. If someone does steal your information, it’s more likely that you won’t have much, or even any, remaining cash available.