Financial management can be a frightening concept for many people. While the temptation to spend is everywhere, you can stay in control of your money with the use of a prepaid card. Here are some ways how prepaid cards can help you manage your finances better:
No Credit Checks
If you’ve already had a credit card application turned down, the last thing you should do is keep applying for credit. Continuing to apply for credit has the potential to further damage your credit rating, but a prepaid card takes that risk away as there are no credit checks involved.
Easier to Budget
There is no worse feeling then spending freely from your main account only to find in a couple weeks that you have too much month at the end of your money. Some individuals have a greater need for budgeting than others, and prepaid cards can help with that. First, transfer funds from your main account to your prepaid card account, with your weekly spending budget in mind. Then, only use your prepaid card when spending money, that way you don’t spend money you haven’t accounted for.
By using a prepaid card for your spending money, you eliminate the risk of overspending, or even worse, the unplanned and exorbitant overdraft charges that overspending can incur.
Separate Your Money
In order to have better financial management, experts advise that individuals keep their spending money separate from their main account. By maintaining your spending money in a prepaid card account, you will know exactly when your funds are low. This practice takes away the danger of overspending and using money outside of your regular budget.
In today’s digital world, internet banking has become essential. A prepaid card account gives instant online access as soon as the account is activated. This makes monitoring your spending habits that much easier. More importantly, you will be able to track when your funds are low, so as to not fall victim to any unpleasant surprises.
Improved Credit Rating
A prepaid card can be very helpful for those who are in the process of rebuilding their credit scores. Prepaid cards are not connected to a line of credit, so owning and using a prepaid card will not disturb your credit history at all. This can be especially beneficial for those who want to protect their credit scores for future financial plans, such as obtaining a loan or property mortgage.
Prepaid cards are a safe and secure alternative to credit cards. As mentioned earlier, prepaid cards are not linked with any credit facility, so in the event of a lost or stolen prepaid card, the potential financial damage is limited only to what is loaded on the prepaid card, and no more. Any damage that happens will not affect your credit score nor your main account’s balance. Furthermore, just like traditional credit cards, prepaid cards are also protected by the chip and PIN security system.
Looking at all the benefits listed above, it is easy to see how prepaid cards can assist individuals with their financial management.