It wouldn't be out of the question to use a prepaid debit card if you want to help your financial standing in the long term. This type of card is easy to carry around and it seems like it can be used in various stores across the board. Even still, if you want to make the most out of this card, there are a couple of things that you should watch out for. As Bob Jain, as well as other names in finance, will tell you, these are 3 of the cons associated with prepaid debit options.
According to financial authorities like Jain, one of the reasons why these cards may not be used is because they are limited. Even though they can be utilized at various outlets, there is only so much that they contain in the way of funds. Perhaps you want to add more funds to it, though; you would have to go through a bit of a process in order for this to happen, which would probably make it that much likelier for you to use another option. There are limits to consider, as Bob Jain would tell you.
For those who are looking to build upon their credit history, you may be better off not going with prepaid debit. There are many reasons but the most prominent, if you ask me, is the fact that cards like these are not meant to be credit-building options. They serve as cash in card form, for lack of better terms, so it's not like they are not going to influence your credit score positively or negatively. If you are focused on the former, though, there are other options to consider.
Prepaid debit cards, depending on the specific cards utilized, may also have hidden fees to take into consideration. This is true whether it comes to adding extra money onto cards or the possibly hidden interest rates attached to the cards in question. It's in your best interest to stay in touch with your bank, inquiring as much as possible on the matter. Otherwise, you may not want to go with this option if you are looking to minimize the amount of added fees on your end.
These tips shouldn't totally deter you from the idea of prepaid debit options, since there are benefits to consider. They are easy to carry around, especially when compared to large amounts of cash, and the fact that they can be used at a number of locations should not go unrecognized. In my view, though, the ideas listed above serve as precautions before you decide to commit to this idea. If these aren't deal-breakers for you, they may be some of the most effective options available.
According to financial authorities like Jain, one of the reasons why these cards may not be used is because they are limited. Even though they can be utilized at various outlets, there is only so much that they contain in the way of funds. Perhaps you want to add more funds to it, though; you would have to go through a bit of a process in order for this to happen, which would probably make it that much likelier for you to use another option. There are limits to consider, as Bob Jain would tell you.
For those who are looking to build upon their credit history, you may be better off not going with prepaid debit. There are many reasons but the most prominent, if you ask me, is the fact that cards like these are not meant to be credit-building options. They serve as cash in card form, for lack of better terms, so it's not like they are not going to influence your credit score positively or negatively. If you are focused on the former, though, there are other options to consider.
Prepaid debit cards, depending on the specific cards utilized, may also have hidden fees to take into consideration. This is true whether it comes to adding extra money onto cards or the possibly hidden interest rates attached to the cards in question. It's in your best interest to stay in touch with your bank, inquiring as much as possible on the matter. Otherwise, you may not want to go with this option if you are looking to minimize the amount of added fees on your end.
These tips shouldn't totally deter you from the idea of prepaid debit options, since there are benefits to consider. They are easy to carry around, especially when compared to large amounts of cash, and the fact that they can be used at a number of locations should not go unrecognized. In my view, though, the ideas listed above serve as precautions before you decide to commit to this idea. If these aren't deal-breakers for you, they may be some of the most effective options available.
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