In my series How To Love Your Money, we’re exploring all money options. All the things you need to do to be well-informed about your money.
A prepaid card is a card you load with your money to make purchases anywhere a debit card is accepted. It’s a safe alternative to carrying cash for those who which to switch to a cash method, but don’t like the idea of carrying cash around with them for fear it will be lost or stolen.
If you’re thinking of using a prepaid card instead of cash, I would suggest you reconsider this option as it still feels very much like a credit and debit card, and will not provide you with the same insights as using the cash.
It’s also an excellent alternative if you want to avoid check-cashing fees.
Instead of traveler’s checks, prepaid cards can be a great option when traveling. They’re also a favorite gift-giving idea because recipients can use them for whatever they want, and they’re widely accepted.
Prepaid cards can offer you a ton of security and convenience. With prepaid cards, it’s possible to eliminate check cashing fees and to get immediate access to your funds by directly depositing your paycheck, tax refund or other income on to a prepaid card.
Don’t Forget the Holds
Just like debit cards, prepaid cards can have “holds” placed on your funds. Hotels and some merchants may need to verify you have the money on the card for the bill. They may make the amount temporarily unavailable for other purchases.
If you’re interested in using prepaid cards make sure you check to see if you can do the following:
1. Ask if you can put money on the card yourself and if so how and what it costs.
2. Get information about where and how you can use the card.
3. Find out if your prepaid card comes with a monthly statement or not.
4. Whether or not you can check the balance over the phone or online.
5. Make sure you fully understand all associated fees for services like activation, monthly maintenance and balance reloading.
Prepaid cards can be a great alternative for those who don’t want to carry cash, want the convenience of a prepaid card when traveling or when you just want to avoid check cashing fees.
Knowing how they work and what if any fees are associated with them is a precursor to using them effectively.