Lately I have encountered many people who are using pre-paid debit cards to pay for online purchases. I am naturally curious so I began asking people why they didn't just open a bank account. I found the answers a little surprising:
One friend told me she likes this option because it limits the amount of money she can spend. She pre-loads the card according to her budget and it ensures she only spends the amount allocated. I thought this was an excellent way to control the budget and stay within it. This friend does have a traditional account at a credit union which she uses for direct deposit of her paychecks and auto-matic bill pay. Smart chick if you ask me.
I have another friend on the opposite end of the spectrum. This friend absolutely abhors banks and the ways in which they charge you to babysit money. Now he would rather donate each paycheck to charity (which he cannot afford to do with kids to feed) then put one cent in a bank account or have to ever set foot inside a Bank Branch. Another unique perspective. I will say that he lives life by his own rules, pays his bills on time and spends the rest on weekend BBQ's or get togethers whenever he feels like it. He is your average family man doing all he can. Lives a good life cause he appears to enjoy it.
Paranoid about theft - with cause:
My last friend shared that she uses these cards because one, she doesn't trust her roommates - she is afraid they could get a hold of her banking info and siphon money out of her account. I've met her roommates and it becomes very clear why she would feel this way. Did I mention she changes cards frequently in case they happened somehow get a hold of the card? Now this scenario does not seem as wise, however, I will say that it works for her and that's really all that matters. I imagine this would work well for anyone needing to keep their money in their own control.
Conclusion: I have a traditional bank account; I put my money in for the bills and pay the money right back out. If someone were to try and steal my money, they would be in for a sorry surprise. If you are like anyone of my friends or if you can't open a Bank account a pre-paid card may be just what you need.