Money Matters: Prepaid Debit Cards

File this one under ‘handy tip’ rather than life changing financial advice, but it’s something that’s really worked for me and Kat over the last few months.

Pre-paid debit cards do what you’d expect – you load money onto them and use them in lieu of a debit card linked to your bank account or a credit card. The benefits come in when you explore a little further. I’m going to be using an example from the one we use – the o2 ‘cash manager’ – but there is at least one alternative I know of.

So at the beginning of each month we load an amount of money onto the card, to cover a line item in our budget – for us it’s food shopping. Every time we go food shopping, we pay with the o2 card. Here’s the advantage – immediately after you spend any money on the card, it sends you a text with the details of how much you just spent, and how much is left on the card. This means we simultaneously know how much we’ve spent on food, and how much we’ve got left to play with for the rest of the month. Eg-

 

o2 text
 

Whilst we use this for food, it could be used for anything you want to track the spending of – for instance, how much petrol you’re using, how much money you’re spending when you go out, – or indeed your spending in general. This helps both with keeping tabs on how much you’re actually spending, and for future budgeting.

Some quick notes – the o2 card is free, but is only available to o2 customers. I’ve read that o2’s market share is 20-25%, but from a quick twitter survey it seems like it might be more than that – probably to do with a lot of people having iphones. So hopefully this is of use. If not, the alternative I’ve found is the Escape card. Unlike the o2 card though, it costs both to buy the card, and to withdraw money from an ATM. Also you have to request the text updates, rather than it being automatic. So, not as good, but still might be helpful if you’re tracking spending. Leave a comment if you know of any better alternatives.

What do you think? Useful, or just a gimmick?

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~ by jgebrown on 14 February 2011.

7 Responses to “Money Matters: Prepaid Debit Cards”

  1. Just signed up for one! Great stuff.

  2. […] More: Money Matters: Prepaid Debit Cards « Apostolic Living […]

  3. Sounds interesting, might be an option worth looking into; what I want to know, is do these cards cost anything to start off with and does it charge you to send a text?

    • The o2 one is both free to get and free to use. It doesn’t charge to receive texts. I’m not sure about sending them, but I’m unsure as to why you would need to – Kat tops up over the internet and just receives texts when the card is used. Other cards may well charge for getting one and using it too – the o2 card is the only one i’ve found which is completely free. Let me know if you find any others!

  4. Also can you post a little more about selling things on ebay? Have been thinking of doing this…

    • Absolutely – I’m just looking into whether it’d be worth starting a separate blog for all things practical, which I might do, and trying to link it in with seminars / webinars etc. Thoughts?

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