Prepaid debit cards can often be found in large retailers, grocery stores, and convenience stores. They’re usually sectioned off with other gift cards, located on an aisle end-cap or free-standing display near the front of the store. Branded gift cards (like Amazon, Starbucks, Chipotle, or Sephora) are easily recognizable by the familiar logos and branding plastered across the packaging. What about the independently branded cards next to them?

Not only are they an excellent gift option that can be used almost anywhere, but prepaid debit cards have also proven to be great tools for teaching finance management and maintaining budgets.

This product is exactly what the name suggests.  When purchasing a prepaid debit card, the customer will indicate to the cashier how much they would like to prepay. The cashier will add the requested amount, and activate the card using a specialized piece of equipment. The card can then be used as payment for any food, service, or merchandise in the cardholder’s favorite stores.

So, why is this specific method of banking helpful?

It’s no secret that Americans love their plastic. Debit cards, credit cards, gift cards, even travel-sized loyalty cards on keychains. While cash-users rummage for change, or hold up the grocery line jotting down their expenditures, the modern-day convenience of carrying money in one square piece makes for fast transactions that are often logged electronically for review at the card-holder’s leisure.

Unfortunately, traditional banks tend to require a minimum dollar amount for deposits and/or withdrawals each month, and signing up for a credit card typically requires a decent credit score. If a person’s income is too low to meet bank minimums, or if he has bad credit, he’ll be disqualified from these two methods of swiping. Prepaid debit cards allow consumers who can’t meet minimums, or who have low credit scores, to enjoy the benefits of card-swiping in a responsible and user-friendly way.

On the other end of the spectrum are consumers who have a checking account and a wallet full of credit cards, but want to reclaim control over their finances and ration their spending. Prepaid debit cards are a perfect solution for new and seasoned budgeters alike. To keep an eye on spending, the consumer can simply designate the prepaid debit card for a specific area of expenses (groceries, bills, gas, clothing, etc.), load each with the desired dollar amount for that month, and relax knowing that the cards will not allow any overdraw.

This product can also be an effective parenting endeavor. To teach children or teens how to manage their own finances risk-free, simply load a card with their allowance. The child will learn how to interact with retail employees, gain an understanding of her own spending habits, and feel more confident entering the tangle of credit scores, loans, and budgeting during adulthood.

No matter what purpose a prepaid debit card serves, most manufacturers make loading the cards easy, allow users access to ATMs, and even keep a running log of where the card is swiped and how much is spent at each location. If bank loyalty is an issue—don’t worry! Most financial service providers have their own version of this useful device.

By making risk-free banking accessible to marginalized or excluded consumers, prepaid debit cards ensure that no American shops without options. Next time you’re in your local grocery store, give one a try!

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