Holiday shopping with prepaid cards can help keep your Christmas budget in check and shopping online eliminates the stress of fighting the crowds that flood into stores after Thanksgiving. Prepaid cards are available through major credit card companies and even stores you are already frequenting.
What Is A Secured Credit Card
Those working to rebuild credit should skip the in-store prepaid cards and apply for a major prepaid debit or prepaid credit card. A prepaid credit card is also known as a secured credit card and it works the same way as a regular card would. The difference is that the credit limit on a secured card is generally lower and the credit limit you are allowed is based on the deposit you arrange with the account.
What Are Prepaid Debit Cards
Prepaid debit cards, on the other hand, are much like gift cards. You set up the card with a certain amount of funds and each purchase you make deducts from that balance you have already paid. Since prepaid credit cards do allow you to make purchases on credit, you can begin to establish or even rebuild poor credit by using the secured credit card wisely.
They’re More Secure Than Credit Or Debit Cards
Prepaid cards are also more secure for online shopping than regular credit cards. In the event a website is hacked or your account number is stolen, you are not responsible for any unauthorized uses. A secured card can even be replaced in as little as 48 hours.
They Help You Stay Within Your Budget
Holiday shopping with these types of cards can help you maintain a strict budget because you are only allowed to spend so much. Even if you are buying on credit with the secured card, you are more limited than if you had swiped a regular credit card.
Prior to heading out on your first holiday shopping trip, determine how much money you can afford to spend for all your Christmas shopping needs. Holiday spending can often send people into debt, so come up with modest figures that won’t be a financial burden come the New Year.
Create A List (And Stick To It)
Create a list of people you absolutely must buy gifts for. These generally include your partner, children, relatives, close friends and maybe even a Secret Santa gift for work. During years when money is especially tight, talk to your extended relatives and friends about drawing names to cut down on gift buying.
Once you have this list, put a realistic dollar amount next to each name and commit to spending no more than that per person. After totaling out the amounts, get a prepaid card with a balance of no more than what you determined you can spend.
Solely using the prepaid card will keep you from overspending by writing checks, dishing out extra cash and losing track of your budget figures. You simply cannot spend more than the prepaid card allows, which is your total budget for holiday spending.