How are Your Excess Credit Card Fees Hurting Your Budget

Prepaid card with no fees

Ok all, it’s time to talk about the American Express® Prepaid Card and why I think EVERYONE should have one! Prepaid credit cards can help you avoid credit card debt, and the usage is increasing every year, according to statistics. The American Express Prepaid Card does not have any fees, whereas credit card can charge a monthly fee, plus a percent of how much you have outstanding. If you plan on using credit cards, it is very important to pay off your entire card every month, and not let it roll over each month. Just because you have an outrageous credit limit of $30,000 (yes, that is what we had before we decided to stop using credit!) doesn’t mean you should max it out, or buy things that you don’t need. Having a prepaid card allows you to load money onto it, and only spend what you have available.

Prepaid cards have had a bad image. Most have hidden fees, no protection if they’re stolen, and are not a method of building credit, but things are changing for the better, and AMEX is trying to change their image too. You ARE covered if it is lost or stolen and there are NO fees.

U.S. Senator Robert Menendez (D-NJ) introduced the Prepaid Card Consumer Protection Act. “Unsuspecting consumers are finding out the hard way that prepaid cards often give you much less than the dollar amount you load onto them thanks to unnecessary fees,” Menendez said in a December 2011 press conference. “We need to ensure that families who rely on prepaid cards are not surprised by hidden charges.”

And with the Serve from American Express card, it isn’t just adults relying on prepaid cards anymore. The PASS prepaid reloadable card is something that parents can give to teens to not only keep an eye on their spending, but to also teach them the importance of money.

Prepaid cards are great for those who have bad credit, no credit or those who are just sick of credit (ME!). I use mine for online purchases, if I am completing an offer from WTF Cat, InstaGC, or any other point site that I am a part of. I know that I will not be overcharged, and I can only spend what I have in there, or the transaction will be declined. I know someone who is bad at remembering to cancel subscriptions like Julep, so she got the American Express® Prepaid Card, added $200 on there, then she used that to pay her bills and left $1 in there for subscriptions. This way, when Julep went to rebill her, they sent her an email saying “Oops, you card was declined, would you like to change your payment method?” and of course, she thought “UGH, I forgot to cancel ANOTHER subscription!” but didn’t have to worry. That was then her reminder to call them and cancel, without the worry of being billed.

Did you know that a $20 shirt, when bought on a credit card, can cost over $200 after fees. This, of course, is assuming you kept charging on your card, and not paying it off each month. Most people do not pay it off every month, and so much money is wasted.

I decided to go with AMEX, because there are no monthly, or annual fees. That was a big one for me. Many prepaid card have a monthly fee of $4 or $5, that little bit each month really adds up. If I went with one of those, at the end of the year, I’d have paid around $50 in fees.

Another huge reason that I went with the AMEX card was their Roadside assistance!

Through Roadside Assistance, American Express may arrange for five (5) basic emergency roadside services to be provided to American Express Prepaid Cardmembers: (i) towing to nearest available repair shop or preferred destination depending on provider availability; (ii) jumpstarts when a battery is dead; (iii) delivery of up to two (2) gallons of gas; (iv) locksmith service if keys are locked in the car; and, (v) changing of a flat tire if the car has a workable spare.

I have needed to make use of this twice so far, and let me tell you, it is a lifesaver! Such peace of mind with this! I ran out of gas, both times….and they were able to send someone out with a couple of gallons, just enough to get me to a gas station, so I could fill up. I don’t know why, I seem to ONLY run out of gas when I actually have money, it’s a curse, I swear.

Do you use prepaid cards? Who are you using, and why?

Willow Stevens

Willow is a mother of six who begins to feel the empty nest, with faer oldest child living with his long-time girlfriend in another state, and the next three begin their talks about jobs and the excitement of college and living alone. Willow started couponing in 2007 to save their family some money on the grocery budget. That's how Freetail Therapy was born, so that fae could share their knowledge of saving money with others. Though the site has become so much more since then, and now includes homeschooling and homesteading info, Willow still does it all on a budget and shares how. Willow enjoys snagging freebies, snuggling with their dog, Xander, drinking decaf coffee, gardening, cannabis and of course, their large frugal family.

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