Pluses and Minuses of Prepaid Credit Cards

Most people think credit cards are a good thing. The introduction of “plastic money” has made life much easier for many. Credit cards are also a status symbol because they show that you can handle your finances.  They also bring you the opportunity to purchase anything that you like.  Even if you do not have a lot of cash on hand all you have to do is use your credit card and you can buy just about anything you want.  Another perk is that it helps save you from being robbed of all of your available funds as the funds are held in your “credit card account.”

The Pluses of Owning a Credit Card

Owning a credit card can be quite beneficial but there are also some drawbacks to using it. First of all it is a very big responsibility, especially when it comes to maintaining your finances and creating and maintaining a positive credit score. Credit cards also give you the chance to purchase now and pay later. However this sense of being financially stable today can be a bit of a delusion that lands you in debt tomorrow.  The more items you purchase, the more debt that you will accumulate. Even worse you may be restrained from using the card further if you spend your entire credit limit.

The bottom line is that if you are going to own a credit card then you better be prepared to make timely payments with it.

Prepaid Cards Offer A Solution

While credit cards seem like a great solution for paying for things when you want to you might want to consider getting a prepaid credit card if you have a tendency to overspend.  A prepaid card works like a normal credit card but you already create a preliminary balance within the account so you know how much you have to spend. This means that if you want to use it to purchase something the value of the item will simply be deducted from your current account. This gives you a lot of benefits since unlike credit cards  you can track the deductions that are happening in you prepaid credit card account. Furthermore you can see just how much money you are spending on purchases every day and this can give you the chance to plan ahead and make a budget.

As you are aware of you balance it is hard to end up “in the hole” as is typical with normal credit cards. This type of credit card truly succeeds for anyone who fears owning a credit card because they may spend too much. This type of credit card also succeeds for people who want to budget their money wisely as well.

Minuses of Owning a Prepaid Card

One of the obvious problems with a prepaid credit card is that you do not have it there for you to use as a boundless resource of spending. If you do spend too much it will be suspended so this is definitely a problem to watch out for you. However as long as you are conscious of how much you have to spend the prepaid credit card should work out fine for you.

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