With it still being tough out there on the economic front, it would make sense that more and more people are looking inward to solve their own financial problems. One of the ways in which cash-strapped folk are handling this situation is by obtaining prepaid credit cards, which allow many of the same flexibilities as traditional credit and debit cards but none of the harassment and liability that comes with having an account with a lender.
A recent report released by the Consumer Federation of America outlines the reasoning behind this trend. Many individuals feel disillusioned with traditional banking, for reasons including poor credit and lack of financial solvency leading to overdraft fees and excessive penalties any time a financial deviation occurs.
But it's not just those with poor finances that are turning to prepaid credit cards: many well-to-do people are finding there are many benefits in using this approach. Parents, for example, can give their children access to a pre-determined amount of money and monitor spending. When the card runs out of cash, kids will then have to prompt their parents for more – which is an automatic alert as to how quickly and on what they are spending their money.
Cost is another factor that is becoming increasingly common in this decision, also. The number of free checking accounts as a percentage fell under forty percent for the first time in recent history, leaving many who do not have wads of dollars sticking out of their pockets deciding that a prepaid solution is the better option.
While not all prepaid cards are completely free and many do have additional fees such as ATM withdrawals attached, there is a variety of selection available to those considering a prepaid card as a way to control spending, avoid excessive activation fees and monthly charges for the privilege of using their money, as well as an added sense of security in an era where even the largest financial institutions seem to be falling prey to hackers and data thieves on a consistent basis.