Using a prepaid card to help get the grocery budget under control. The Experiment…
Have you ever used a prepaid card before? I’ve only used them a handful of times so my experience with them is pretty limited. When Visa approached me to learn about their Visa Clear Prepaid program I was a bit skeptical (because I had heard some not super wonderful things about prepaid cards before, and the rumors weren’t on the prepaids card side, if you know what I’m saying.) but I was also super curious because of my limited experience with prepaid cards. As you may have guessed I’m kind of obsessed with anything and everything that can help save money, budget, pay down debt, and manage finances. If there is a tool out there that can help me and other people with their money goals I’ve got to know about it.
Prepaid cards are ideal for someone who really wants to stick to a budget but has found that they usually go over the set amount that they have designated for each category. For example, with me and my husband, a big money issue for us is our grocery bill. We ALWAYS seem to overspend on food. At the end of the month we’re usually at the very least $100 over-budget on what we were supposed to spend. We get frustrated, and vow to do better next month. So, in an effort to reign in the grocery bill we decided we’d see what it was like to try out a prepaid card for a few months and then report back on how it goes. Because life isn’t quite hectic enough we (I;) decided we should do a little experiment which brings me to…
The Prepaid Card Grocery Experiment
Why a prepaid card you ask?
For one, we can easily load the prepaid card with our pre-determined monthly grocery budget at the beginning of each month. To get started I went to the Rush website, created an account, and transferred the grocery budget money ($250) from our online banking account to the Prepaid Visa® RushCard. So, since we’ll be doing this experiment for a few months at the beginning of each month I will transfer the funds for that month’s groceries over to the card. (While I did this process online money can also be added in person at places like 7-11, Walgreens, and Family Dollar.)
What card did you choose?
We applied for the Prepaid Visa® RushCard online (rushcard.com) in about one minute flat. While Visa did approach me about trying out this card I would’ve gone with a Visa prepaid card anyway because it’s a brand I know trust. Plus, Visa is accepted everywhere, and that makes life easy. I’m all for easy. Also, I found out that Visa has recently set up Visa Clear Prepaid standards so they can give consumers piece of mind. These “standards” were created specifically for Visa’s prepaid cards, and they were made with the goal to clearly communicate fees and provide protection for consumers. The RushCard meets those standards.
How do you set up the card?
I mentioned it briefly above but after I applied online the card arrived in the mail within the week. Then, I called the phone number on the sticker that was attached to the card and set a PIN.
What are the fees?
With this Prepaid Visa® RushCard the fees are easy to understand, and that’s super important to me. (The confusing and convoluted fees associated with prepaid cards were one of the main areas of controversy and negativity associated with these types of cards in the past.)
I found that when I selected my card online there was one fee depending on the fanciness of the card design that I chose. I picked one of the $3.95 designs because, personally, I don’t really care how fancy my card is. That one-time fee was then deducted from the amount on my card after I added funds the first time. Then, on the 1st of the month there is a monthly fee that is $7.95. Once the card is set-up it can be used just like you would use any other Visa debit card, and there are no other fees that pop up to surprise you throughout the month.
We’ll be doing this grocery budget experiment the next few months and while we’re seeing if it works I’ll also be exploring the world of prepaid cards quite a bit more, and I’ll be looking for answers to lots of questions.
The questions I’ll be looking to answer:
- How convenient are these prepaid cards really?
- How easy is it to find out the balance and stay up to date on where you stand with your remaining balance for the month?
- Were we able to get our grocery budget under control by using this method?
Would you consider doing this experiment with us? Have you used a prepaid card before? Do you have any questions you want me to look into and explore?
This post is sponsored by Visa Inc. I am an ambassador and have been compensated for my participation. However, like always, my opinions are completely my own (and I wouldn’t have it any other way).
That’s an interesting experiment! I’m interested to see how it works. My grocery spending is the line item that I have the hardest time with. I’ve tried using cash only, but I’m so afraid I won’t bring enough. I’ve thought about bringing a calculator to the store and calculating my purchases along the way, but that seems like such a hassle.
These fees seem awfully high to me.
I hope your readers will shop around more. A lot of the grocery stores have their own prepaid Visa cards that are cheaper and also offer gas and food discounts. For example, the Kroger prepaid cards only cost $3 a month and you earn points for shopping at a Kroger store.
I don’t understand how/why this is better than just using a cash grocery budget. You’re paying VISA to spend money that you already have in your bank account because VISA is accepted everywhere? Cash is accepted everywhere for groceries, and assuming you withdraw it directly from your bank or a fee-free ATM, then there are no fees at all. And there are a LOT of fees with this card.
And if you actually read the Cardholder Agreement (Number 11, third paragraph), you can go OVER the balance on this card, and then you’ll be in debt with VISA (with I assume even more fees): “You are not allowed to exceed the available amount on you Card through an individual transaction or a series of transactions. Nevertheless, if a transaction exceeds the balance of the funds available on your Card, you shall remain fully liable to us for the amount of the transaction.” So this card won’t even help you stick to your budget :/
I personally use Google Wallet. There’s no fees as long as you transfer directly from a bank account. You can also use the app to track the balance and add money – which gets added almost instantly. It’s also convenient for transferring money to friends and you can use tap and pay from your phone at certain retailers as well instead of using the physical card.
I agree with Leslie.
If I need a reloadable grocery card, it will be a gift card from the store I shop at. I am not willing to spend $8.00 once a month for fees! In my area I that is a loaf of bread, a gallon of milk, a package of cheese, and bologna. Or a pound of burger, package of buns, and 10 ears of corn.
Recently I have been debating on restricting a whole month’s food budget to one of these prepaid Visa cards. Where I live, I know of a currency exchange that sells prepaid Visa Cards for only $6.95 when you first purchase it. After that, it’s free to load and it has two plans one monthly and one is pay as you go which is $1 for every time you use it. I think this prepaid Visa would be a lot better but I do have to keep in mind that I don’t buy all of my groceries at one place. I shop at different places which is why I haven’t taken this challenge up. I guess I’m going to stick to plain old having a budget. But I guess this Visa might work for you.
We use a prepaid card through our bank when we travel. No fees for the card or to transfer funds to it, it’s a master card so widely accepted, and in the event of fraud our checking and savings accounts aren’t compromised and funds can be replaced immediately.
$4 for a card and $8 a month seems like a lot of money to kiss away for no good reason.
I’ve never used a prepaid card. Wondering if you’ve heard of Grocery University? Was that something I heard of here? It’s great.
I think this will be interesting to see if readers (and you, yourself, Anna!) find the fees associated with the card worth the money you might save by staying within the budget of the card. Once you get down to it, you’re actually paying to use the card which, by ATWS standards, seems a little unnecessary and wasteful. But I guess if you’re a person who really can’t trust themselves with a cash budget and you regularly exceed your budget by $10 or greater, that $10 fee for having the card might not seem so big.
You are paying 38% APR for GROCERIES by using that Prepaid Visa card!!!
What I don’t understand is why you would ever spend 3 percent of your grocery budget on the ability to use a prepaid card. $7.95/month (or $96/year) is absolutely ridiculous. You might as well be financing those groceries. A simple APR calculator shows that 7.95/month equates to paying 38% APR on your $250/month food budget. Only someone getting paid by Visa would ever do that. And makes me unsure about taking advice from anything on this blog.
AMEX Serve has ZERO monthly fees if your live in TX, NY or VT, or if you have direct deposit, or if you deposit $500/month (my family’s grocery and restaurant budget). If you can’t do any of those, it’s $1/month. That’s it. No other fees to use the card, unless you don’t use one of their 25,000 MoneyPass ATMs.
Do a simple google search and you’ll see that there are free prepaid cards. I can’t imagine someone who is supposed to be an expert on savings to suggest paying 38% APR on groceries.
Hi Chris, The grocery experiment is just that – an experiment – to see what does and doesn’t work. Thanks for sharing your thoughts.
I realize my original comment was pretty sassy. Sorry about that; I usually don’t comment on blogs, but I wrote it really late while searching for my own solution to our eating-out budget problem and there were several posts about Visa Clear prepaid cards that seemed to talk-up the high fees all while acknowledging that they were being paid for the post. This struck a chord with me, and I apologize for being so aggressive. I could have easily worded things nicer. Plenty of other commenters did a much better job of pointing out their reservations about the high fees in an appropriate manner.
I hope your experiment is a success, and I look forward to reading about it in the future.
A lot of supermarket chains have their own gift card. I wonder why the prepaid card has to be a Visa or Mastercard?