How to Avoid Maxing Out Your Prepaid Card

Are you prone to maxing out your prepaid card? Sure, they may work almost the same way as debit or credit cards but prepaid cards are unique because they do not have any bank support. You should already know this when you own a prepaid card or two because you load them up with funds directly and not via a bank.

Maxing out your prepaid card is an indicator of your financial situation. First, it reflects your spending habits. You may not notice it, but you are taking your card for granted by shopping on impulse, just because you know it has funds. It can also be a sign of you not adding a sufficient amount of money on your card, mainly when you use it for necessities.

Using up all your prepaid card’s funds may cause you serious financial problems in the future. You may want to keep these tips in mind to avoid going low on your prepaid card funds:

  1. Be honest with your spending habits.

Perhaps the first step towards using your prepaid card wisely is by being honest with your spending habits. Why are you using prepaid cards in the first place? What are the most critical expenses to which you make payments using your card? It is essential to have them figured out as early as possible because you are going to allocate just the right amount of money for them on your card.

If you are using your prepaid card mostly for shopping and other leisure activities, then you may want to load it up with funds that can cover these so-called lifestyle expenses. You should also keep in mind that using your card incurs higher fees, so it is wise to think before you spend.

  1. Anticipate the fees.

Most people end up maxing out their cards because of the fees they incur. They most probably didn’t read the fine print and are often wondering why and how they use all of their cards’ funds. 

You can prepare for the additional fees by doing two things. First, you read the fine print. Get acquainted with the user agreements and the extra expenses you may have to spend on when making transactions using your card. Second, you may want to allocate a percentage of your total fund deposit for these fees. This way, you don’t go short on funds and can use your card correctly and efficiently.

  1. Spend only on your necessities.

You may want to keep in mind that prepaid cards do not come with any institutional financial support, so you cannot run to the bank for backup in case your card goes low on funds.

It is thus recommended that you plan your spending activities first and see which of them are necessities that you have to pay off regularly. From there, you can dedicate your prepaid card for just one or two specific needs and add an amount that matches their costs without running out of funds.





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