cut up credit cards to avoid overspending. However, this is harder nowadays when almost every transaction, from grocery purchases to bill payments, happens online. Therefore, here’s some advice for these impulsive buyers who are looking to become debt-free, or avoid going into debt.
According to experts, there are many people who are aware of the fact that they are just not good with credit cards, but want to do better in managing their personal finances. Prepaid credit cards are one of the best remedy for such individuals. Prepaid credit cards allow users to transfer a certain amount of money onto their card before making payments. Unlike revolving credit cards, which only require a minimum payment each month, prepaid cards create a shift in mind-set since the consumer is only working with the money they actually have.
“I like being able to just look at the balance in my Cash account and have a simple yes or no answer to whether or not I can afford something at the moment,” Clin noted, having switched to a Wealthsimple Cash prepaid Visa to pay for takeout, groceries, gifts, entertainment and other non-essential expenses. According to Liz Enriquez, a personal finance mentor for Canadian millennials at Ambitious Adulting, prepaid credit cards are beneficial for individuals who struggle with impulsive shopping and need more structure, since they will be forced to create a budgeting plan and maintain self-discipline.
Over the recent years, there has been a significant increase in the number of Canadians using prepaid credit cards and the sector is expected to see a rapid growth in the next few years. A study commissioned by the Canadian Prepaid Providers Organization (CPPO) In October last year found that the number of open-loop prepaid accounts in the country are expected to double to 93 million accounts by 2025.
