Advantages of Choosing a Prepaid Debit Card over a Credit Card

By: Jean Gaile

If you are like so many people today, you have heard that it is wiser financially to use a prepaid debit card than a standard credit card. Of course, you do want to make smart financial decisions in your life, but you do not want to blindly follow advice without taking a closer look at what the specific benefits are of using a Visa debit card over a credit card.

How Money Is Spent
With a credit card, you are permitted to spend money up to your credit limit. Ideally, each month you would pay the balance off in full. However, many people do not do this, and the result is that you end up carrying over debt from one month to the next. Essentially, you are borrowing money that you have to pay back. With a prepaid debit card, however, you load your own funds into the card regularly. Some people use this card as their spending card to help control how much they spend on meals at restaurants, movies, and other “extras.” When you are spending the money, though, this money is yours to spend. You are not borrowing it and forcing yourself into a situation of being in debt to a credit card company.

Interest Rates and Fees
So what is so bad about about in debt to a credit card company? Other than the fact that at some point you have to pay that money back to the credit card company, these companies also charge rather high interest rates. In fact, many people today are carrying balances on their cards that are too high for them to pay off in a single month or in several months, and they are being charged over 20% interest on their balances. Because the money you use with a Visa debit card is yours and you are not borrowing money, there are no interest charges. Plus, many credit card companies charge annual fees as well as late fees if you fail to make the payments on time. These fees add up over time. Altogether, the debit card provides you with the ease of using a credit card without the costs associated with credit cards.

Other Features
A prepaid debit card also offers plenty of other benefits for you, too. With this card, you can send money abroad to family overseas by simply loading funds onto their card. You can also send money abroad by loading funds onto your card and doing a free card to card transfer. These methods are more affordable than wire transfers and other forms of remittance. In addition to the ability to send money abroad, you can also use this card to give teens a spending account or to teach them how to control spending while they are still young. You can also use this to send money quickly to your kids who are away at college, too.

As you can see, there are benefits for you to use a Visa debit card over a credit card. Whether you are trying to cut down on costs associated with using a credit card, control your spending habits, or save money while transferring money to family, you will want to apply for a debit card today and start enjoying the benefits yourself.

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