How Prepaid Debit Cards Might Be Costing Budget-Conscious Atlanta Consumers
At first glance, prepaid cards might look like a dream come true for those of us with growing credit card debt, according to a recent MSNBC.com story.
By loading one of the many prepaid debit cards available at the local drugstore or supermarket with a certain amount of money, we can swipe it like a regular credit card, but without the risk of exceeding our credit limit, hurting our credit score or busting our budget. Unfortunately, it turns out that prepaid cards come with costs of their own, say Atlanta bankruptcy attorneys.
Since they aren't really credit cards, the credit issuers that sell them can get away with all kinds of hidden fees. For instance, many prepaid debit cards charge a dollar or more for each purchase. A dollar might not seem like much, but if you're using these cards for everyday buys that could mean 10% interest on a $10 lunch or 25% interest on a $3 coffee. But it doesn't stop there.
The cards also come with fees between $1 and $20 for activation, monthly maintenance, cash withdrawal and balance inquiries. And lest you think you might save money by using the card less, there's a dormancy fee, too. On the one hand, being able to set a spending limit for yourself can help you stop your debt from snowballing. On the other hand, you're still essentially paying interest - you're just paying it upfront rather than later. You'd be better off putting yourself on cash-only budget.
Prepaid cards do have some benefits. For folks without bank accounts, they're still far cheaper than payday loan centers - now those places charge some serious interest. But for most of us, they're better in theory than in practice. You don't need a special card to set a budget and stick to it - you need willpower. And, in some cases, you need a little more cash inflow.
If the debt you already have is keeping you from preventing future debt, it's time for a fresh start. Bankruptcy can make it happen by lowering debt, which can free up more cash each month and in turn lower your reliance on credit. Our Atlanta bankruptcy attorneys can identify a bankruptcy plan that meets your needs when you try a free personal debt analysis.