Benefits and Options for Your Prepaid Debit Card

If you choose to stray from financial institutions, a prepaid debit card can be a smart choice for your cash transactions. Choosing which prepaid card you want to go with will involve assessing your needs against a variety of factors. You’ll want to consider these questions before going with one particular card.

· Why go with a prepaid debit card?

· Are they free?

· What are your best options?

Advantages

With annual fees being tacked on to every credit and debit card around, you may have decided to pull your money out all together, or keep minimal in a savings account. Because of this, you may have a lot of cash somewhere that could be infiltrated. Choosing to use a prepaid debit card is very similar to having a checking account. You are able to load any amount you choose, onto your card, and use that to conduct your various transactions.

Having a prepaid debit card will allow you to keep the bulk of your money in a bank savings account that is accruing interest. You can then place your spending money on your prepaid card. This can help you reduce your spending, by having a very distinct limit. This can also be good those with teenagers who are under parental financial guidance. Giving them a weekly allowance to spend on their prepaid card will keep them from spending their paycheck every week.

Costs Involved

Similar to a regular credit card, prepaid debit cards can have an annual fee. The fee can depend on a variety of things such as monthly balance, monthly reload amount and rebate. For the most part, though, you’ll find almost all of these cards have no annual or activation fee. As always, it’s important to do your research. While many companies will boast their services are free, it isn’t uncommon to find hidden fees in the fine print.

If there are fees associated with your card, they are often waved in various ways. The Mango Mastercard’s $5 monthly fee is waived when you load $500 a month. Using this card to pay bills will allow you to hit that mark easily, avoiding the extra costs. Other cards may offer different fees based on tiered amounts of monthly deposits.

Best Options

While many of the prepaid debit cards offer similar options, there is a large selection that stands out from the typical no activation fee. Look for cards that offer:

· Online bill pay. Give yourself one less thing to think about and get your bill pay connected with the prepaid card.

· Free direct deposit. For those avoiding banks, this is a great way to avoid having to deposit checks.

· Cash back. Many cards offer cash back whenever you hit a particular spending increment.

· High maximum loading amount. If you are using this card as your main way to keep cash, you can find cards that hold up to $10,000.

· Free savings account. The ACE Elite Visa offers 5% APY with their free savings account.

· Budgeting tools. Some cards will come with free online budgeting options, as well as text and e-mail balance updates.

Getting a prepaid debit card makes sense for many people. As a parent with children, this is an easy, free way to keep them from over spending. You can provide them an allowance by loading a certain amount a month. Those of you who are simply skeptical of keeping money within any institution can make great use of these debit cards. With minimal fees and great features, you’ll get everything you would at any other bank.