DEAR HARRY: I finally paid off my credit cards, and I'm never going to get into hock that way again. My bank is now offering a "prepaid debit card." This card requires that I prepay the bank for the credit they put on the card. The balance comes down as I spend, and I can't spend more than the prepaid amount. That will save me the money I presently get hit for in overdrafts on my old debit card. The problem is that there is a monthly charge of $4.95. My overdrafts last year totaled almost $100. Sounds good to me. How about you?
What Harry says: The best way to handle "cards" is to have a credit card and pay the balance in full each month. Sure, that requires discipline, and too often people go overboard as you did. The next best way is to get a debit card without overdraft protection. That means that you'll never spend more than the funds available, and those hefty overdraft charges will be avoided. These new prepaid cards are good for the banks. The prepayment does not bear interest (pitiful that it is) and they have that monthly fee. I don't even like them for temporary amounts such as an account for a child on vacation. Why not go for the regular debit card? n