I've long advocated cash as the perfect solution to people who can't keep themselves to a budget. It's simple, you take $100 a week or whatever out and that is your spending money. You spend it on whatever you like but when it's gone it's gone. This system works wonders for people who lack the self control needed to stick religiously to a budget. You simply remove all plastic from the equation and there is no way they can overspend.
Prepaid credit cards provide the same benefit, but without the hassle of having to carry all those papers and coins around. basically the theory works like this. You put money on your card, and you use it as you would use a normal credit card. But instead of each transaction increasing the amount you have to pay at the end of the month, you are decreasing the positive balance you have on the card. When it reaches 0 you can't use it anymore. In other words it's impossible to get into debt with a prepaid credit card just as it is impossible to get into debt when you use cash to stick to a budget.
If you've ever used a prepaid phonecard the idea is basically the same. You put a set amount of cash on the card, you use it however you want to and once your balance reaches $0 you either top it up or stop using it. When incorporated into a sound budget plan the card gets topped up again at each payday, and never in between.
The one major benefit that a prepaid credit card gives over cash is that you can get a monthly break down of where your money has gone. If you are in financial trouble, analyzing your spending is a critical part of getting everything back on track. Hopefully you have already worked out how much 'spending' money you can afford and this is the amount that is put on your prepaid credit card each pay day. But you can further analyze where your spending money goes by looking over your account. most people find a few things the first few months that they are spending more money on that they ever realized. When you limit the supply of money - such as by using only a set amount of cash or a prepaid credit card - then the value of each dollar seems to be more. I have actually personally seen two people give up smoking when it was spelled out to them by this method just how much money they were literally burning every month.
Tom refused to live in debt any longer and got to work increasing his income. You can too by visiting this website now.
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Prepaid Credit Card
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