We’ve already talked about how credit cards can help with personal budgeting. What if you like that idea in general, but the potential for added debt concerns you? In that case prepaid credit cards might be another option to consider. Let’s talk about how prepaid credit cards can help you maintain your budget, and how prepaid credit cards have risks and drawbacks of their own.

Here is how you might use prepaid credit cards to help you get more control over your budget. But keep in mind, this assumes your prepaid credit cards can be refilled over and over again. One-time-use cards won’t work.

How to Use Prepaid Credit Cards to Help Manage Your Budget

1. Get prepaid credit cards for any major “accounts” you want to budget for (such as groceries or discretionary spending).
2. Fill the prepaid credit card with the amount of money allocated to that account for the month.
3. Take only the appropriate card(s) with you when you go out. This will stop you from tapping funds on another card for an expense because you want to spend too much and go over budget.
4. Evaluate your budget and spending at the end of the month. Adjust your budget if necessary, and refill your prepaid credit card.

Cautions on Using Prepaid Credit Cards for Budgeting

Prepaid credit cards can certainly be easier to manage than having to carry around stacks of cash to limit your spending power. But they have downsides too. There is still risk involved. The cards might expire. When they do, if you don’t renew and get a new card you might forfeit any remaining balance. Check the card’s terms and conditions carefully.

Of course the issue of fees in general is a drawback compared to cash. When you’re trying to get your spending under control, you might not consider the fees a worthwhile investment for what the cards offer. To help you decide, we’ve created a list of prepaid credit card fees.

There are many ways you can choose to manage your personal or family budget. You might use traditional credit cards. You might prefer debit cards. You might opt to stick with cash. Prepaid credit cards are just one more option. You know what fees you’re okay with when it comes to building a system you can stick with. And you know what tools would help you exercise more control rather than enticing you to overspend. Decide what’s right for you, and you’ll have an easier time sticking to any budget you set.