People’s views on spending have changed due to economic woes. To manage their spending and budgeting, many Americans now use prepaid cards.
Pre-loaded funds are required to purchase branded prepaid card (cards that have an American Express or Discover logo), so they cannot be overdrawn. Cards can be used wherever the logos are recognized.
G. Michael Flores, Inc., a management consultancy firm specializing with financial institutions, published a direct comparision study in October. It found that people who have checking accounts pay more to get similar services to those who use branded prepaid card users.
Flores’ research revealed that basic checking accounts cost between $200 and just over $350 per year. Prepaid cards with direct deposit cost $110 to $210 per year.
Prepaid cards are a cost-effective option for consumers who rely on cash transfers and money orders to meet monthly obligations. Prepaid programs often allow for automatic payroll deposits, which means that money can be available on your card when you need it.
“While prepaid cards should not be considered a replacement for checking accounts in all circumstances, we see that consumers are finding a number of ways to use the cards to promote fiscal responsibility and smart budgeting,”Kirsten Trusko, President & Executive Director of Network Branded Prepaid Card Association (www.nbpca.com
“Families purchase prepaid cards and load spending allotments for the month, professionals have their paychecks directly deposited onto them to avoid the wait time of cashing a check or ATM fees, and under-banked consumers use prepaid cards to avoid the costs and hassles of check cashing services,”Trusko has been added
Here are some tips from the NBCPA to help you budget and save money with prepaid cards
* Directly deposit paychecks onto the card for immediate access to funds.
* Load only the amount your family can spend each month.
* Use prepaid cards instead of checking accounts to make automatic bill payments and carefully monitor spending online.
* Give prepaid cards to teenagers to teach them the responsibility of using a card. Allow them to load cards with their own money.
* Make digital payments without the risk of credit card overdraft.
* Find easy access to digital payments, even as credit card qualifications become more stringent.
