People trying to get out of debt are nervous about getting rid of their credit cards.  Some say they’ll need to keep one for emergencies or need it for buying things online.  But if you continually rely on credit cards, it’s a sure sign that you’re spending money you can’t afford to spend. Pre-Paid credit cards could be a great solution for you.

Prepaid Credit./ Debit Cards

Pre-paid cards offer all the perks with none of the dangers that regular credit cards pose.  You can have a pre-paid credit card or a pre-paid debit / ATM card. For a debit card, you have to pre-load them before using them so there’s no monthly bill and no interest charges!  Simply load the card up with cash and use it the way you would normally use a credit card. There is a convenience fee associated with this so cash is definitely a better way to go but this type of solution could work great for going on holidays, putting yourself on a budget, and for putting your teenaged kids on a budget.

If you have a child who is a student living away from home, one of these loadable debit cards is a good way for you to send them funds in an emergency or as part of their living expense as well. They can most often access the funds within a few hours after you’ve loaded the card and you can often load it via the Internet or by dropping in to your local Western Union money transfer office.

If you sign up for a pre-paid credit card, it works very much like a regular credit card in that you pay interest and have a limit but the account has your funds in a savings account. The benefit of this type of plan is that it can help you rebuild your credit because if you make payments on time every month, it will start to report positive credit for you.

Living debt free is what you need if you want financial freedom.  Living on a budget and cautionary spending are the first steps to getting there.

Where do you get pre-paid credit cards?

There are companies that offer pre-paid credit cards that allow you to pay a fee for a credit limit in return. Do shop around as the interest fees can be quite high.

In terms of pre-paid debit cards, there are at least a dozen options that you can find either online or at your local cheque cashing store such as Money Mart or Western Union.

Get rid of credit card debt as soon as possible! If you do buy a pre-paid credit card to rebuild your credit, use it very wisely and be careful you don’t fall into the old credit card trap that got you in debt in the first place.