Your Money - Your Life Prepaid cards - Handy New Tool There is a new area of credit/debit cards that may be worth your consideration. Several companies and personalities are now endorsing prepaid cards. Prepaid can be a great way to help you budget. You load your card with the amounts you have budgeted for, food, gas, clothing, etc. You are only able to spend what is available on your card so there is no chance for you to increase your debts. Decide w hat your budget can afford at the beginning of the month and your limits are in place. As good as this new cards are, there are some drawbacks. Pre-paid cards are not reported to the credit agencies. They cannot be relied upon to build, or improve your credit history. This doesn't matter to some users, but if you are trying to build a credit history these cards are not the right tool to use. The other important aspect to consider is the cost of these cards. The costs on some can be ridiculously high. Three dollars per month is an acceptable rate, anything more is not. There are also extra fees that you should be aware of so you can avoid them. Despite these potential drawbacks, pre-paid cards can be a great tool to help you stay on budget and have better control of your money. |