Pre-Paid Gift Cards in Your Wallet?
You have seen them any time you walk into a pharmacy or a grocery store. They hang there on the shelves in a variety of designs and denominations. You may have wondered, who buys them and why?
Even though originally prepaid debit cards and gift cards were created for the underbanked communities there are now many reasons for anyone to consider using them. Here are 3.5 reasons why these cards deserve a place in your wallet.
1 – Travel
Have you ever traveled somewhere only to come back and a few months later notice strange purchases from stores you have never heard of? The reality is in many countries businesses do not and guard privacy as they do in the United States. If you primarily use debit cards or cash, using a prepaid gift card or re-loadable debit card can be your best bet. While it will not prevent unauthorized purchases, it will prevent your primary bank account from being burglarized and lessen the headaches of dealing with your bank in the aftermath. Most of all you’ll be able to protect your identity and primary bank account information.
2 – Budgeting For Children
Never give your children access to your primary credit cards. All you need to do is look at the numerous newspaper articles where children rack up massive credit card bills though in app purchases in video games, and downloads of music and videos. By using a re-loadable debit card, your children will know that there is a finite balance on the card and when they run out, they run out. This will give you peace of mind knowing that you will not find any unwelcome surprises on your credit card statements, and perhaps more importantly children will learn the value of money.
Another benefit of this using these cards, is that unlike cash, if the card is ever lost or stolen, you can easily have it replaced.
3 – Trying Out A New Budget
Are you considering a new purchase that will have a major impact on your budget? One strategy that you can take is to take the amount of the new purchase and automatically direct deposited a reloadable debit card. This way you will be able to live with the impact of the new budget and see if that is something that you can do. The other benefit of loading it to a debit card instead of keeping it in a separate checking or savings account is that you will not see it on your primary bank statement and this will give another level of realism to this experiment.
3.5 – Make A Little Extra Money
Every so often banks that issue reloadable debit cards or gift cards will run various promotions in order to get you to use those cards more often. Some cards have offered money if you direct deposited either your paycheck, your government benefits or your tax refund on to the card. Other times you will find retailers such as office supply stores and grocery stores offer discounts on gift cards.
You can further combine this by purchasing cards online and using a cash-back portal. If you really want to get adventurous you can look into manufactured spending to really get a sense of how far and how deep this rabbit hole really goes.
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