Using pre-paid debit cards for budgeting

I posted previously about how the lovelies from Moneysupermarket had offered to send me a pre-paid Mastercard topped up with £100 to use for what I wanted, as long as everything I bought was under RRP. Obviously I wasn’t going to say no!
I decided to use the funds as my budget for tarting up my living room and my mission is complete. Not only do I have some lovely new and shiny items in my living room but I also have first hand experience of using one of these cards.

The card I was sent was a Freedom Prepaid Mastercard.

About pre-paid cards.
Despite coming from Mastercard and similar companies, these cards have no credit facility and are not linked to your bank account. They are a card that can be topped up online, via bank transfer, at the Post Office and at selected Pay Points.

Where can you use pre-paid cards?
You can use these cards pretty much anywhere you would use a normal debit card. You get your own pin number for use in shops, and the cards have the same information as you would find on a bank card so can be used online. I even added my card to eBay and used it without any problems.
You can also withdraw cash from your card at any ATM using your pin number.

There are many prepaid cards on the market and they all have different fees.

For the purpose of this campaign I chose the Pay As You Go option. Clearly if you use a card regularly for multiple purchases it is better to pay a monthly fee but for a situation like this, where you are setting a budget to do something i.e. a project or perhaps Xmas shopping, the PAYG option is probably best.

Ease of Use
I found the card very easy to use. The only issue I had was with one retailer where the name and billing address didn’t quite add up but I can’t blame the retailer or the card for this in truth, it was a circumstance of having a card registered by someone else and sent out rather than getting my own and registering it in my name. The one thing that is worth mentioning is that when this retailer put the transaction through again I was charged an additional transaction fee.

How can you keep track of what you have spent?
It is easy to check your ongoing balance online. I found that the balance was updated pretty much instantly after anything was spent and it didn’t take long for an itemised summary of what I’d spent, where and any transaction fees to be updated.

Are they worth using?
I would say absolutely yes. I am something of an interior design tart and find it easy to get carried away with beautiful things. Having my budget separate to my own account meant that I was much more careful with the spending, more aware of what I had spent and couldn’t “accidentally” go over budget. For a project such as a room makeover, new clothes, Christmas shopping and in fact anything that you want to budget for and not be able to easily dip into the savings or bank account (like many can do when putting money aside in an account) it is an ideal solution.

And the makeover?
You’ll have to wait until I have everything properly put together and tarted up to see it all so you can look forward to another interior design post but from my £100 I managed to get new curtains (thanks to CB Furnishings, Thirsk), 6 gorgeous coordinating cushions (From TerryFabrics who I have to say have fantastic customer service skills) and a lovely print from Unique Home Designs Framestore’s Ebay shop. All were very easy to deal with, provided great service and had items under RRP (or Best Price on eBay) so fitted in perfectly with this budget challenge.

Thanks to Moneysupermarket for asking me to run this mini-makeover challenge. Not only have I had enormous fun, I have learnt a lot.

A sneaky peak!

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