Whether or not we have good or bad credit, there are plenty of instances in which a prepaid debit card may be a better solution. In some cases, you may not want to reveal or hand out your true credit or debit card information to unknown vendors, while in other cases it may be due to travel or living circumstances. Whatever your reason for needing a prepaid card, there is an option out there to accommodate you. Here are some of the best instances in which to use a prepaid card in order to avoid hassle, overspending and identity theft.
While On Vacation
I can think of plenty of reasons as to why using a prepaid card on vacation is a good idea. For starters, you can leave other forms of payment at home and not have to worry about keeping track of them or what to do in the event they are lost or stolen. On top of that, prepaid cards can serve as great budget planners; if you load up a card and dedicate yourself to using only that card while on vacation, you will be far more likely to stay within budget and not accrue extra, unplanned expenditures.
If you are making a purchase online from a vendor overseas, you may want to isolate the chance of your identity being compromised by using a prepaid debit card. By loading said card up with enough to cover the transaction and no more, you can use the card as a one-time expenditure to pay for the item and avoid having any threats posed to your financial or personal information. Many prepaid cards offer similar protections as regular credit and debit cards; consult with each card issuer before making your selection.
If you have a teenager or growing child in your house and you want to teach them the basics of fiscal responsibility without handing them an actual credit card, then a prepaid card may be just the thing you need. You can load a pre-determined balance on the card each week or month and allow your child or teen to learn to deal with balancing expenditure versus desire. Research has shown that those who use prepaid or parental-monitored cards as young adults are 30% more likely to have a high credit ranking as adults.