For those who are looking to save money in the long term, prepaid debit cards may be the tools to use. It's important to keep in mind that they can be used in a number of stores these days and it doesn't hurt that they are reasonably easy to carry around to boot. With these points in mind, you want to keep a couple of ideas in mind if you want to use these cards in the long term. In fact, here is a list of 3 possible negatives that various financial names, Jain included, can bring to your attention.
According to financial authorities like Jain, one of the reasons why these cards may not be used is because they are limited. Even though they can be utilized at various outlets, there is only so much that they contain in the way of funds. Perhaps you want to add more funds to it, though; you would have to go through a bit of a process in order for this to happen, which would probably make it that much likelier for you to use another option. There are limits to consider, as Bob Jain would tell you.
One of the other negatives of prepaid debit options is that you cannot build a credit history with them. Yes, these may be cards but they serve as nothing more than housing for your funds, not unlike a typical debit cards. You won't be able to amass a strong credit card score, which is one of the many financial features that people tend to overlook from time to time. If you would like to use this option for the purpose of credit-building, you are probably better off looking elsewhere.
It's also important to note that, depending on the card you want to use, there might be hidden fees attached to it. For example, if you want to add a few hundred dollars to your card, chances are that you will have to pay what is called a loading fee. This doesn't even cover the potential interest rates that will probably have to be accounted for as well. For those who are concerned about having to pay tremendous fees, you might be better off consulting your bank about this.
With this level of discussion done, it is clear that there are reasons as to why prepaid debit cards are utilized. They can prove to be some of the best money-saving tools and I believe that, if handled correctly, they can teach kids about the importance of saving money in the long term. Of course, these are a couple of pros that go with the cons. Both of these should be considered with prepaid debit options, since they will be preferred by some people more than others.
According to financial authorities like Jain, one of the reasons why these cards may not be used is because they are limited. Even though they can be utilized at various outlets, there is only so much that they contain in the way of funds. Perhaps you want to add more funds to it, though; you would have to go through a bit of a process in order for this to happen, which would probably make it that much likelier for you to use another option. There are limits to consider, as Bob Jain would tell you.
One of the other negatives of prepaid debit options is that you cannot build a credit history with them. Yes, these may be cards but they serve as nothing more than housing for your funds, not unlike a typical debit cards. You won't be able to amass a strong credit card score, which is one of the many financial features that people tend to overlook from time to time. If you would like to use this option for the purpose of credit-building, you are probably better off looking elsewhere.
It's also important to note that, depending on the card you want to use, there might be hidden fees attached to it. For example, if you want to add a few hundred dollars to your card, chances are that you will have to pay what is called a loading fee. This doesn't even cover the potential interest rates that will probably have to be accounted for as well. For those who are concerned about having to pay tremendous fees, you might be better off consulting your bank about this.
With this level of discussion done, it is clear that there are reasons as to why prepaid debit cards are utilized. They can prove to be some of the best money-saving tools and I believe that, if handled correctly, they can teach kids about the importance of saving money in the long term. Of course, these are a couple of pros that go with the cons. Both of these should be considered with prepaid debit options, since they will be preferred by some people more than others.
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