Prepaid credit cards are a great way of controlling how much you and your family spend. All you have to do is set up a monthly standing order to prepaid card account and do not top up any more in between. This way you will have a certain amount to spend each month, and when it’s gone, it’s gone. By sticking with your card, you physically won’t be able to spend more as the card will not let you complete a transaction if you don’t have enough money. If you’re trying to get out of debt this work like magic.

If you have children you can send them off with their pocket money on their card and that will mean that they can only spend as much as they have. You can also be assured that they won’t lose the money, even if they lose the card. Children ages 13 to 15 can get the card if they specify their parents as account holders; those 16 or older can apply for their own.

prepaid credit cards

By granting a prepaid card, parents will be able to teach their teens valuable financial lessons that will, hopefully, translate over to the real world. Teens with credit cards are irresponsible and are known to rack up an amazing amount of debt in a very short time. By showing them how quickly money can disappear the prepaid cards teach teens responsible spending habits and demonstrate that those charges have to be paid off somehow.

It’s up to the parents to stick with a firm plan if they are going to give a teen a prepaid credit card. You can not fill it up every time the teen spends the entire amount that was placed on the card. Set a monthly limit and explain to your child that once the money is gone then they will just have to wait until next month. If you want to take it a step further, allow the teen to borrow money and take that amount from next month’s total. You may also want to have your teen work for the money through chores or at the family business until they get a job on their own.

Prepaid credit cards are very similar to unsecured credit cards and can be used anywhere bank credit cards, MasterCard or Visa credit cards, or debit cards can be used. The difference is that the prepaid card acts more like a debit card. There is no need to worry about them going over the limit and you can track how much money they are spending on a monthly basis. An additional bonus is in knowing that your child is learning how to manage their money.

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Prepaid credit card is more like managing a checking or savings account than managing a credit card. What you have in your account is all you’re able to spend. There’s no revolving balance or due dates to think about.

Prepaid credit card is a payment card (usually MasterCard, Maestro, visa electron or Amex), and much like gift cards; pre-loaded with your own money. You don’t need a credit check to get one, and it’s accepted at the same locations as a normal debit or credit card, including on the internet and abroad (internationally). They are the same as credit cards, but without the credit because it is not a traditional credit card, it doesn’t report transaction history of the card holder to credit rating bureaus and in the process does not help in building credit.

The big advantage of the prepaid card is according to the providers that the product will prevent youngsters from falling into debt since money cannot be spent beyond the amount already loaded onto the card. It also helps control your credit card spending with prepaid limits.

Prepaid Credit Card

Another benefit of prepaid credit card is extremely useful when you’re traveling or on holiday. Firstly this is because a large proportion of credit card fraud happens abroad. If you are using your normal credit card or debit card you stand to lose a lot of money. Fraudsters can empty your accounts or rack up huge credit card bills in your name. However a prepaid card is not linked to your bank account so you are protected. If you use a prepaid card the maximum you can lose is the remaining balance on your card.

There are several prepaid cards that are specifically for use abroad and allow you to spend abroad without foreign currency commission or transaction charges. A prepaid card will save money as it will limit your spending abroad. Using a prepaid card on holiday will therefore help you keep tabs on your spending and you won’t have to come home to a horrible bill.

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