Top Off: Pay As You Go Products and Benefits

From cell phones to coffee, the way you use and pay for these products and/or services is changing. While traditionally buying these products would mean that you place an order or use the service and then pay for it, with the "pay-as-you-go" option, you pay for the product or service before you even think about, choose or use it.
 
In most cases, this means that, in exchange for the appropriate amount of money, the company that provides the product or service you want gives you a magnetized card encoded with the amount you paid. With this card, you can buy any products or services this company makes until you use up all of the money you prepaid. Although the precise policies and methods of use for these prepaid cards will vary from company to company, you can generally use them at any time, whether it be tomorrow or a year from now.

Advantages of Using Prepaid Cards

If the idea of using prepaid cards seems odd or unnecessary to you, consider the following advantages associated with using prepaid cards instead of paying for items in cash or with your credit cards. Prepaid cards:
  • eliminate the need to carry cash, which you can easily lose or immediately spend without keeping track.
  • make great gifts. If you don't know what to give someone, giving them a gift card to their favorite store is a good option, as it gives the person the freedom to choose what he or she likes.
  • prevent you from spending more than you can afford. While credit cards make it easy to overspend, especially for those with really high credit limits, prepaid cards will only let you spend as much as you initially put on the card.
Similarly, they are also good for kids. Not only will prepaid cards help teach children about money management, but they also help ensure that your kids will spend the money you give them on the proper items.

Types of Prepaid Cards

These days, you can get (or give) prepaid cards for a number of different types of products and services. Some of the different types of prepaid cards include those for:
  • cell phones
  • credit cards (Those that most major retailers accept as a valid method of payment, such as Visa®, MasterCard®, Citibank®, American Express® and other major credit card companies, offer prepaid card options.)
  • department stores
  • gas
  • grocery stores
  • restaurants
  • spas (i.e. to get a massage, facial, etc.)
  • toll roads.
In simple terms, modern prepaid cards are similar to the gift certificates people gave each other in past decades. The major difference is that many people are getting prepaid cards for themselves because of the added convenience and security they offer.

Where to Get Prepaid Cards

In general, most companies who offer prepaid cards will do so both in stores and online. If you are getting a prepaid card in the store, you will simply pay the cashier, who then swipes the card to encode it with the amount you paid. Alternately, online you will enter your credit card information into a secure site (noted with a lock in the URL bar).
 
You will also enter your address or the address of the person who will be receiving the card. In anywhere from a few days to a few weeks, you will receive your prepaid card in the mail.
 
Resources
 
Mastercard® (2009). Mastercard®Gift and Other Prepaid Cards. Retrieved September 1, 2009, from the Mastercard® Web site: http://www.mastercard.com/us/personal/en/aboutourcards/
gift_prepaid/.  

Stewart, C. (2007) 10 unbeatable advantages of prepaid cards. Retrieved September 1, 2009, from the American Chronicle Web site: http://www.americanchronicle.com/articles/view/27718.