Prepaid Cards: A Good Idea for Students?
While prepaid cards can be a good way to budget your finances as a student, you should make sure it is the right choice for you.
These cards function much like a debit card, but you load a certain amount to avoid over spending and over-drafting. Using prepaid cards can help you save cash and make life as a student less stressful.
However, this option isn’t right for everyone. They don’t offer many perks for people who are already very good with money. It is key to do research and weigh all of your options before getting a prepaid card.
How do prepaid cards ork?
There are no major differences between prepaid cards and traditional debit and credit cards.
They work essentially the same way. You pay at vendors with the money you have, but unlike credit you can’t spend what you don’t have and unlike debit you can’t overdraft.
The cards are accepted anywhere credit and debit cards are, whether it is a clothing store, your college bookstore, or bars and restaurants. It can also be used to withdrawal cash just like your regular bank card.
The only real difference is that you prepay what you want to use on the card and can’t use any more than what you have on it. You will never have to pay the pesky charges that add up quickly. But one thing is that you may be charged to take out cash.
To add money on the card, you can deposit cash but this isn’t the only way.
You can also add onto the card online, on the phone, and with a phone app. Although it depends on what kind of card you have, you can get additional fees depending on how you choose to add the money onto the card.
It is easy to check your balance, you can do it online. Some prepaid cards even provide instant updates and notifications to your phone that alert you to how much you have been spending and where it was spent.
The costs of prepaid cards
According to the specialists at the website MoneyPug, which is used to find the best UK prepaid cards, it isn’t uncommon that companies offer prepaid cards as a bonus for buying a product or signing up for a service.
Utility and broadband providers will do this often, with values reaching as much as £100 or more.
Many prepaid cards are free but others will charge modest fees to sign up for the service.
Others will also add fees for canceling it. It completely depends on the company, the card, and sometimes even your financial situation, but it is always best to do your research and look for the cards with the lowest rates.
Some app-based prepaid card banks are known for offering the most advanced services and benefits.
Should I get a prepaid card?
Some prepaid cards are better than others, but you should make sure whatever card you choose is right for your particular situation.
For one, if you struggle to save because they have built-in spending limits. If you have bad credit, using a prepaid card may be for you.
They come with a guaranteed acceptance rate that is perfect for students who may not have any credit score at all. If you are rejected from credit companies, a prepaid card may be a good alternative.
Another reason to get one is if your university has partnered with a business to provide students prepaid cards. Some may even double as a form of ID, with a personalized picture and interest free payments.
Donations to the school may be included in the prepaid card scheme, but this may benefit you as well as the school. You may also be rewarded if you spend money locally, merchant programs have also been established with prepaid card companies and universities.
International students also find prepaid cards helpful. Student bank accounts for studies abroad are not the best. They may have heavy consequences if you overdraft.
Banks are happy to provide prepaid cards to students studying abroad and family members are even allowed on the card to support the student and provide emergency cash.
While prepaid cards aren’t for everyone, they can be very helpful for students looking to find a new way to allocate funds and spend money.
Do your research and you will have better chances at reaping the benefits of a prepaid card.