- Wednesday, 21 April 2010Prepaid cards are "magic for
debt management", finance journalist Jasmine Birtles has today suggested.
These are payment cards that are topped up with money on the internet and can be used in many places such as retail outlets.
Once the money runs out, the consumer cannot use the card to pay for things, which makes them useful for budgeting if a person only puts on what they can afford each month.
Ms Birtles told moneymagpie.com:"This way it's impossible for you to get into debt because you can't spend more than you have on the card."
She added that anyone can get a prepaid card as credit ratings do not matter and no borrowing is involved, possibly reducing the risks of
bankruptcy.
Some advantages of this potential method of
debt management proposed are that the cards are low risk, there is no debt, and they are safer than carrying cash especially on holiday and fraud risks are reduced.
However some cards charge for transactions or for topping up so Ms Birtles advises they are probably better for online shopping.
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