How to budget with a prepaid credit card

A prepaid credit card is the perfect way to stay in control of your money and your spending. This is especially true if you've had problems with credit card spending in the past.

These cards keep you from overspending and going into debt so they can be a great budgeting option for you.

There are a few ways you can use a prepaid credit card to stick to your budget. You can use it for some types of spending or for every penny you spend. This will really depend on your style and on the kind of deal you find on a prepaid credit card.

If you find one that has very few fees, you could easily use it to pay for just about everything. Here are a few ideas on how to use these cards effectively.

Use it for birthdays, Christmas or even weddings

When a big event comes along, it's easy to overspend. Birthday gifts, Christmas and weddings are typical budget blowers! You could use this card to keep your spending in check.

Throughout the year, put money aside for these events in a savings account and when they come around and it's time to shop, load your prepaid credit card with the savings. If you use your prepaid card to pay for the gifts or goods, you can only spend what you've saved.

Use it for some of your spending

If you don't really like the idea of having to use this one card for all your purchases or if you prefer to use cash or cheques for some things, you could use a prepaid credit card for just certain types of purchases.

If you tend to overspend when you shop for clothes or unnecessary items like new books or CDs, you can put your monthly budget for these things on the card. When the card runs out, you'll be unable to spend any more money.

Use it for all your spending

One thing that you can do with most cards like these is have your entire paycheque automatically put onto the card each time you get paid. This can help you get started with budgeting because it means that you'll never be able to spend more than you make and it's a great way to stay out of your overdraft. Once the card runs out of money, it will be rejected, so you won't be allowed to overspend.

This can also be a useful tool if you want to be able to track all your spending closely but are too afraid of overdraft fees on your debit card to use it. Like a regular credit card or debit card, most prepaid cards will allow you to track your spending online and will show you where all your money went.

No matter how often you decide to use your prepaid credit card, you can make it work for you. Whether you decide to use it for certain purchases or for every penny you spend, you should definitely think about using one of these cards as part of your budgeting armory.