Everything You Should Know About Prepaid Credit Cards

These days more and more people in the UK are moving away from carrying physical cash in favour of credit cards. Prepaid credit cards have become quite popular in the last decade or so for a number of reasons. If you want an easier and more convenient way to pay for your online and offline purchases, you will need to learn more about this option.

How Prepaid Credit Cards Work

You will find that prepaid credit cards provide you with all the convenience of a credit or debit card, except the funds are already loaded on. This means that you can only spend as much as you have on the card at any given time. If you try to make a purchase with one of these cards that exceed the amount that is on it, the transaction will not go through. The criteria that you have to meet to get one of these cards are far less than with most credit cards.

Getting a Prepaid Credit Card

If you are interested in getting a prepaid credit card, you will need to know the process you will have to go through to get one and how to use it.

• Fill out an application: The first step in acquiring a prepaid credit card is filling out an application. These applications are usually fairly short and don’t take a lot of time to complete. Just make sure that you only submit completely accurate information, because otherwise you could get denied.
• Activating the card: Next you will have to actually activate the card. Once you receive the card itself, you can set the PIN that you want associated with it. Usually this is a four-digit number. You can do this online or over the phone. Some prepaid credit cards can be activated at an ATM.
• Loading Funds: There are a number of different ways to load funds on a prepaid credit card. You have the option of transferring money from your bank account to the card, which usually takes 2-3 business days. You can also transfer money onto the card via SMS text or by going to a local post office using cash. Any of these methods for loading money are pretty simple and straightforward.
• Spending the money: Once you have loaded the funds onto the card, you can start using it. You will use the card just like a normal debit card. You will be required to enter your PIN when making a purchase. You can also get money from the card at an ATM, though you may incur fees.

Cost of Prepaid Credit Cards

There are a number of costs associated with prepaid credit cards that you should know about. You might have to pay a fee just to get your initial application for the card processed. Not all issuers charge a fee, but some of them do.

There are also fees that you will have to pay when loading funds onto the card. This can vary anywhere from £1 to £3, depending on the card and loading method that is used.

You may be required to pay transaction fees when you use your card to make a purchase. A majority of issuers tend to waive this fee though. If you ever need to replace your card because it is lost or stolen, you will most likely have to pay a fee of some kind.

Some prepaid credit cards have inactivity fees that kick in when you haven’t used the card for a certain amount of time. It is important that you know what the issuer’s policy is about this.

Benefits of Prepaid Credit Cards

There are quite a few benefits to having a prepaid credit card, including the fact that they can be used just about anywhere. These cards are ideal for online purchases, as they act just like debit cards. All you’ll have to do is enter your card details when making a purchase on a secure website.
Prepaid credit cards are also widely available and easy for just about anyone UK resident to get. The process for obtaining one of these cards is very simple and not very time consuming.

Who Should get a Prepaid Credit Card?

Some people can benefit from prepaid credit cards more than others, including young people (under the age of 16). If you have recently come to the UK for work, you might find that one of these cards can help you quite a bit. Prepaid credit cards are ideal for anyone who is serious about security. These cards minimize security problems that are commonly associated with traditional credit cards. If you want to get a prepaid credit card, it is important that you learn about them before making a choice either way.

Budgeting Techniques That Really Work

Anyone who wants to manage their money effectively needs to have a budget in place. There are numerous ways of creating a budget, and it’s important to know what they are. The more you learn about these budgeting styles, the easier it will be for you to stay on track financially. This article will explain how each method works and the benefits they have to offer.

Traditional Budgeting

The most basic method for budgeting involves looking at your budget for the previous year and using that information in the present. It’s important that you revaluate your budget if there have been any changes whatsoever to your expenses or finances. You don’t want to just assume that you can use the same budget. If nothing has changed for you financially from the year before, there is very little work to be done.

50/30/20 Law

The 50/30/20 law is a budgeting method that can work well for most people. This technique is made up of the following components:

• 50: It’s never a good idea to spend over 50% of your total earnings on crucial things like rent, food, car payment, etc.
• 20: Set aside at least 20% of your earnings for savings. This will ensure that you have the money you need for emergency situations.
• 30: You should avoid using more than 30% of your earnings for things like cable subscription, shopping, and general entertainment.

This is definitely one of the better budgeting methods because of how simple but effective it is for most people.

Debt vs. Income Calculation

Those who follow this budgeting technique add up the total amount of their outstanding debts before determining how much of their earnings to use towards monthly payments. It is important that you do this so you know what your absolute limit is. It’s always a good idea to pay as much as possible on your debts so that you can take care of them as soon as possible.

Digital Budgeting

There are lots of budgeting apps and software programs that can help you create a budget for yourself. These tools can make it very easy to figure out how much you need to spend on essential items, and therefore want you can afford beyond that. Take some time to look into the different options you have so you can select one that will really help you. These days a lot of people are using these digital tools to their financial advantage.

Goal-Oriented Budgeting

This form of budgeting consists of coming up with bold goals for your savings. One of the biggest benefits is that you save yourself quite a bit of time and effort while still remaining focused on your financial health. Make sure that you are realistic with the nature of your goals and of course the timeframe. You want to give yourself enough time to accomplish your goals but not so much that you are tempted to keep putting them off.

Priority Budgeting

With priority budgeting, you consider which expenses are most important so you know which ones to focus on the most. Take the time to write down all of your recurring expenses and rank them from most to least important. Your rent or mortgage payment will probably be at the top, with things like daily cups of coffee and cable subscription at the bottom. This can really help you put things into perspective, allowing you to make the right decisions.

Tips for Following Your Budget

Creating a budget is one thing, but actually following it is another. It can be easy to let yourself slide, so you need all the tips you can get.

• Review it: Take as much time as necessary to review your budget before making any decisions based on it. You might also want to consult with a friend or family member to get a fresh set of eyes.
• Minimize your spending: If you find that you are currently exceeding your budget, reduce or freeze unnecessary expenditures for the time being. There are probably a hundred different ways to do this in your life.
• Get support: If you have a spouse or partner, make sure that you lean on them for help and support. This is something that both of you should be concerned with.

Why is Budgeting Important?

It is crucial that you keep track of your spending and plan out your expenses so that you don’t fall into a pit of debt and misery. Those who do not have a budget or do not follow theirs are far more likely to go deep into debt, period. Spend all the time you need to come up with a budget that you can follow as easily as possible, because otherwise you’ll just end up going rogue again.