21st century commerce looks considerably different than in previous generations. Business and trade started with the barter system that has long since been replaced by using various forms of currency ranging from precious metal and seashells to paper notes. Currently, we are rapidly seeing plastic credit and debit cards supplant paper and coin money as the main medium of transactions. Right now almost a quarter of all purchases are made with paper money and many expect that percentage to drop in the near future. The rise of internet commerce has increased the popularity of plastic cards and their convenience and ease of use has also attracted users. Prepaid debit cards have become an extremely popular form of payment for people. The advantages of these cards could see their presence become even greater.
Parental Teaching Tool
One of the most important, and sometimes most difficult, lessons a parent can teach their child is that of being personally fiscally responsible. This becomes even more important when that young person goes off to college and experiences that first breath of freedom is all aspects of their lives. Prepaid cards are a great way to guide their child on the path of financial responsibility. Certain cards like the SpendSmart prepaid card is designed to give parents the piece of mind they need to know that their child will not be racking up debt that they will end up being responsible for later.
Perks Of Prepaid Cards
One of the best perks of a prepaid debit card is that it is a secure form of payment. Most are carried under the umbrella of a major network brand and with that distinction they are protected by various consumer protections. Some companies even allow their cards to have deposit insurance if they are lost or stolen. Most cards are also pin protected and can’t be used by any party that does not possess the correct pin number. Therefore, even if lost there is a good chance that your funds on the card will still be there so long as you request a new card. This differs greatly from cash where if it is lost it is gone and a credit card that can be used by anyone if a vendor does not check the user’s identification.
Personal Financial Responsibility
Many adults have trouble controlling their spending. This is proven by the level of consumer debt that hamstrings many American households. Credit has many easily fallen into pitfalls and people quite frequently spend and live beyond their means. Prepaid debit cards only have spending power that extends as far as the money that is in the account. This puts a cap on spending that people can’t go over even if they wanted to. The benefit of this is it can help control those spending impulses and perhaps spur the habit of making and sticking to a budget that is feasible according to your lifestyle.
Since these cards have become so popular and are sponsored by some of the largest financial institutions in the world they can be used virtually anywhere. This includes brick and mortar stores as well as online vendors. Also, you do not need credit to obtain one of these cards. Therefore, bad credit will not exclude you from taking advantage of a prepaid debit card.