When shopping without cash, you have two primary options: credit cards and debit cards. Each one has its own benefits and drawbacks. For one, credit cards offers you purchase protection but if you don’t pay the balance in full each month, you will pay more than buying with cash because of interest. With a debit card, you don’t have to worry about interest charges, but you don’t have purchase protection like you do with credit cards. Wouldn’t it be great if there was the best of both worlds in one product? Well there is: pre-paid cards.
What is a Pre-Paid Card?
A pre-paid card acts like a credit and debit card. You load money onto the card via telephone online, direct deposit, a bank account or with cash. From there, you use the card anywhere it is accepted. In most cases, you will get an American Express, Visa or Mastercard pre-paid card. You can use the card anywhere these credit cards are accepted. You can use the card in store, online or at the ATM.
Pre-Paid Card Benefits
The main benefit is that there are no fees. No monthly or annual fees. No transaction or overdraft fees. With many other pre-paid cards, you are charged a monthly fee just for having the card.
Another benefit is that you can set up an online account to view transactions and track spending. This is great because unlike with gift cards, you don’t have to call an 800 number to know your balance.
There are no credit checks either. So if your credit isn’t stellar, a pre-paid card could be right for you.
Pre-Paid Card Drawbacks
There are two main drawbacks with pre-paid cards. The first is that there is a maximum load amount in any one month. It is usually $2,500. If you don’t spend that much in a given month, then this drawback does not apply to you. The second main drawback is that there are ATM fees. Usually the card issuer allows for one or two free ATM withdrawals per month. After that, the card issuer will charge you an ATM fee. Additionally, the bank ATM may charge you a few as well.
Why Use a Pre-Paid Card?
As I pointed out at the beginning of this post, the main benefits of pre-paid cards are that you get the purchase protection as though you are using a credit card, but you cannot overspend. If you only have $500 on the card, then that is all you can spend.
Another reason to use the card is protection should you lose the card. With the American Express Pre-Paid Card, you simply contact American Express and you will not be responsible for any fraudulent charges. They will refund any charges made to the card if it is lost or stolen.
I highly recommend a pre-paid card if you have trouble managing your money. It will teach you responsible spending because you can only spend what is on the card. Pre-paid cards are also great for teaching teens. The PASS Card from American Express℠ is an ideal choice. It offers all of the same features I outlined above, but allows parents and teens to monitor the spending on the card.
American Express Pre-Paid Card
This is the card I highly recommend. With it you get all of the benefits of American Express. This card has no monthly, annual, transaction, or overdraft fees. There are numerous ways to put money on the card and you can use your card in stores, online or at the ATM.
Other benefits of this card are 24 hour customer service, roadside assistance, and purchase and fraud protection. You also get access to discounts and special offers as an American Express card holder. If you are interested in learning more or signing up for the American Express® Prepaid Card, click on the link.