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| We use reloadable debit cards to avoid the hassle of calculating how much money is in our checking account. |
Who doesn't hate sitting down and doing the monthly household budget? You have to watch your money vanish dollar by dollar as you tick off bill payments. As in many other families we have too much credit card debt. It's not like we need to pay for everything with a credit card. It is just that they are so darned easy to use. But my wife finally hit on an idea that is working for us. I think you will like it.
Do you know what reloadable debit cards are? We didn't until we got a debit card as a rebate on mobile phones. I was expecting a check but I guess the days of the paper check are dying. So we got $200 rebate cards. My wife was able to use them to shop for groceries.
Rebates are like loans collateralized by merchandise. If you buy a $600 smartphone and get a $150 rebate, you're paying for the rebate in monthly purchase contract. Why do retailers do this? I guess because it guarantees them a regular income stream.
While you cannot reload the rebate cards many banks now sell reloadable debit cards. You can also buy them at Target and Walmart. As we were using these rebate cards my wife and I agreed they were saving us money because we weren't using the credit cards. If you don't pay off the credit card balance every month it accrues interest. The interest payments make everything you buy more expensive.
Well, since we use credit cards to avoid having to think about how much money is in our checking account, we decided to sign up for a reloadable debit card. This way we control how much money is loaded onto the card. When it stops working we know we've spent too much money. It's easy enough to pull out our regular checking debit card and cover a last-minute purchase. And I sometimes use the credit card too.
But here is where the plan seems like genius. You can use these cards to pay your monthly bills too. So we began loading a debit card for groceries and a debit card for the utilities. We made small contributions from our paychecks over 3 months to build up the balances. This way we know we have the money for the utility bill ready to go. I've sometimes been late on these bills because I had to wait for other payments to clear our checking account.
By preloading a debit card with enough money for the utility bill we know we'll be able to pay that bill when it comes due. We won't worry about accidentally spending that money.
The same point is true for our grocery bills. We're learning to shop within the limit of that debit card so that we never have to dip into credit or checking. My wife checks the grocery card's balance with an app on her phone. It's not that big a hassle and it is saving us money.
I find that using these debit cards makes it easier to budget for our bills in advance. We don't have to worry about whether we have left enough money in the checking account because it's already on the debit cards.
