A blog aimed at credit union managers encourages them to offer their members prepaid cards as a way of managing tax refunds more effectively. The windfall can easily be used up paying down bills or blown on a frivolous expense. The blog suggests a middle way.
That said, members worked hard for those refunds. Shouldn’t they be allowed to enjoy at least a portion of it as well? Just lumping it in with the regular funds to cover the day-to-day expenses is no fun at all. Your credit union can help; recommend a prepaid debit card. By loading all or some of their refund onto a prepaid debit card, members can keep that money separate from their other accounts. That way, it’s there when they want to spend it on that specific purchase, or even safely kept for that proverbial rainy day.
Mercator Advisory Group’s own consumer research has found in the past that nearly 20 percent of U.S. consumers say they use prepaid cards for budgeting. Tax time is a good moment to teach customers about money because it is a point where they have cash and need to do something with it. Prepaid cards as a segregated pool can help people handle their money better and be a more valuable customer by building their assets and cross-selling another product.
Overview by Ben Jackson, Director, Prepaid Advisory Service at Mercator Advisory Group
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