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Using Prepaid Credit Cards to Control Your Debt

Updated on December 1, 2009

Controlling your debt is one of the things that should be at the top of your list of things to accomplish today. It really doesn't matter if it is the holiday season, or just another day of the year. You can control your debt by using a prepaid credit card and just a little will power. Here's how.

First, select a prepaid credit card that you want to use. There are plenty of choices out there, so compare wisely. Try to find a prepaid card that charges as little (or no) fees as possible. The less fees you have to pay, the more you will have to spend. Now the monthly fees are not extravagant; but why pay the fee if you can find a card that does not require one.

Then, check out the prepaid credit card company you have chosen to do business with, to make sure it is a company that you want to deal with.

Before obtaining the card, make sure you read the fine print; which is the terms and conditions agreement. You really need to understand what you are getting into before you obtain and start using the card.

Create a plan around the amount of money you want to spend to control your debt. With a prepaid credit card, you will only be able to spend the money you load onto the card. Couple that with your will power (just load the card with the money you budgeted to spend and no more per month) and you have created a very good instrument and method to keep your spending under control.

It is as simple as that. OK! Nothing in life is really simple, but you have the method you need to control how much (or how little) you go into debt. If your will power is low, ask your best friend(s) to help out. The idea is to spend only what you want to buy, and keep spontaneous spending to a minimum. Actually, zero spontaneous spending is best.

Lastly, to stay on top of your credit score, remember to check your credit history by obtaining an annual credit report from any one of the three major credit bureaus; or try to obtain a free credit report to keep up to date about your credit history.

Today, or during any holiday season, or at any future event; controlling what you spend gives you the power to control your debt. I say, “Take control of your financial future!” I'm pretty sure that the banks will try to help you get into as much debt as possible. After all, that is one of their biggest tools for making money off of you.

So, go shopping; but, remember to leave your credit cards at home. Instead, use a prepaid credit card (no more than two) and help change the phrase “Shop 'til you drop” to “Shop, have fun, and stop when your budget tells you too!” It's the responsible thing to do.

Also, use will power, stay in control, and budget your money. This will help you keep your debt level as low as possible.

Good Luck & Happy Shopping!

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    • profile image

      Sheila 3 years ago

      Yes. I just find 2 calling cards conitsg $0.16 / minute from Australia to Philippines.Check outJust my own suggestion, Continental calling card is better because it has no maintenance fee. Both have PIN free access feature. That means your auntie can register her mobile phone number, and no need to dial PIN number any more.Hope the above information is helpful to you and your auntie.

    • floating mind profile image

      floating mind 8 years ago from Chicago, Illinois

      MarygrauSheila - Thanks.

      Lady_E - I am glad my hub is useful to you. The short answer to your question is, Yes! You can expect to pay a fee to initially get a prepaid credit card. Some prepaid credit card companies will wave all fees under certain conditions. Review the policies associated with the card to find out more information about its fees. Try a google search for "uk prepaid credit card" to find more options.

    • Lady_E profile image

      Elena 8 years ago from London, UK

      Very useful advice. I will bookmark to read again. I used to have so many credit cards, they make it so easy. (Just filling in a simple A5 marketing leaftet and they come through the post)

      Well, I've cut down and about a week ago decided to apply for a prepaid one. Floating mind, they are asking for an upfront payment of £15. Do you think that's right?

      Anyway, I closed the application page on line and will maybe think about it again later. (I could use £15 to buy 3 beautiful Xmas gifts for people. lol)

      Your Hub is very useful. :)

    • profile image

      MarygrauSheila 8 years ago

      Very informative! Great hub