A savings account is a good place to keep money for short-term goals. However, this is not a good choice if you are saving money for a goal that is five or more years away. Money saved for long-term goals needs to be protected from “purchasing power risk.”
Inflation tends to cause prices to increase each year. That means that the money you have in 10 years won't purchase as much as the same amount would purchase now. The risk that your dollars will be worth less in the future is called “purchasing power risk.” For example, remember when you were a child how much less money it cost to purchase a candy bar? It may have only cost you a nickel or dime to buy the same candy bar that now costs $1.00. Inflation (in the years since you were a child) has caused your money to have less purchasing power than now.
A savings account does not protect you from purchasing power risk. Investing in stocks and bonds for long-term goals can help avoid purchasing power risk.
There are options for investing your money. Examples include: individual stocks; bonds; and mutual funds that invest in stocks and bonds. With good investments, you’re likely to make more money than by keeping your money in a savings account. However, you have to be able to handle some losses, too. Your investment’s value can go up or go down.
The value of an investment in stocks and bonds changes from day to day. Over a year, it’s not guaranteed that your investment’s value will increase. The risk of losing some of your money is great in any one year. However, if you keep an investment for a longer time (for example, five to ten years) you are more likely to make money.
Some people use personal finance terms interchangeably like ‘checking account’ and ‘bank account’ or ‘interest rate’ and ‘APR’. In these instances, this is understandable.
Yet, when it comes to prepaid, debit and credit cards, it’s important to note that these cards are not the same thing. While they all may show a network logo like Visa, MasterCard, American Express, or Discover, these three types of cards are actually quite different.
With that said, these cards do have one thing in common: if you’re not using cash, you’re likely using one of them to make your purchases.Read on to learn more about the differences between prepaid cards, debit cards and credit cards.
A debit card is linked to your checking account through your bank. When you use your card to make an in-store or online purchase, the money gets deducted from your bank account. You can also use your card at an ATM to withdraw cash.
If you happen to spend more than the amount in your account, you may be charged an overdraft fee.
Prepaid cards are not linked to your checking account so you don’t really need a bank account to have one. With a prepaid card, you load money onto the card and then use it to make purchases or withdraw money from an ATM. You can put money onto your card with any of these options:
•Arrange for a paycheck or regular payment to be directly deposited onto the card
•Add funds at retailers or financial institutions like a Walmart or currency exchange location
•Use a reload card which works just like a gift card (it contains a code that becomes linked to the amount of money you paid the cashier. You can then load the card over the phone using your code)
•Transfer funds from an existing bank account
Be mindful that some loading methods may come with a small fee. There are different types of prepaid cards to choose from: free prepaid debit cards, re-loadable prepaid cards with no fees, and no limit prepaid debit cards, to name a few. Make sure you understand the terms and limits of this type of card before you use one.
A credit card allows you to make purchases by borrowing from a credit limit instead of using the money you have in your checking account or funds you loaded onto a prepaid card.
With a credit card, you’ll have a minimum amount that you are required to pay each month (reflected on your bill), but it’s a wise idea to try to pay off the entire balance if possible. It’s also important to note that you’ll receive a certain limit when approved for a card. You can then spend up to this amount regularly so long as you make your minimum payments on time.
Credit cards can help you build your credit and demonstrate that you are a trustworthy borrower. In fact, credit card companies report your borrowing and payment history to the three major credit bureaus and this helps shape your credit score.
One final note about credit cards: when you decide to apply for one, make sure you understand all the fees and terms.
*Prepaid Card vs. Debit Card vs. Credit Card*
As you can see, there are quite a few key differences between the three cards above, so let’s discuss them in more detail.
*Benefits of the prepaid card*
A prepaid card is different from a debit card based on the fact that you don’t need a bank account to have a prepaid card. And, when you get a prepaid card you won’t be subject to any credit checks or inquiries into your banking history because you are using loading your cash onto the card. Another perk: you may be able to deposit your paycheck right onto your prepaid card.
*But that prepaid card may not be so safe to use*
While prepaid cards can look and feel like debit cards, they aren’t as safe as debit cards. Why? Since debit cards are connected to your checking account, you can easily monitor your account and spending online for free. Your money will also generally be protected if your debit card gets lost, stolen, or wrongfully charged.
*Now let’s talk about credit cards vs. debit cards*
Credit cards are different from both prepaid and debit cards due to the fact that when you use a credit card you are borrowing money while hopefully building a solid credit history. Better yet, many credit cards offer rewards in the form of points or cash back that can be redeemed for statement credits, travel, or merchandise. Some people like to use credit cards to purchase groceries, gas, and other everyday needs in order to rack up reward points.
As long as you’re not overspending and can pay your bill off in full each month, there’s nothing wrong with using this strategy. However, if you struggle with controlling your spending, you may want to steer clear of using credit cards for your daily purchases.
Instead of credit cards, consumers often choose debit cards for everyday spending. Why? Debit is safer than cash, you can monitor your activity online with mobile banking, and you can choose a bank that doesn’t have fees.
Prepaid cards and debit cards have some important similarities and differences. You can get these cards even if you have a bad credit history. You must have a bank account to have a debit card because it is linked directly to the account. A prepaid card simply requires money to purchase or reload the card. They don't affect your credit score, but both give you a convenient way to buy things without having cash on hand.
Prepaid cards and debit cards come with a Visa or MasterCard logo. Prepaid cards can also be linked to a specific brand for stores, gas stations, restaurants or other businesses.
Prepaid cards and debit cards have a similar function. They both let you spend money directly instead of borrowing funds like you do with a credit card. Cards that are branded as Visa or MasterCard can be used to pay for purchases at stores, online retailers and just about any other merchant that accepts those credit cards. Prepaid cards that are linked to a specific retailer, restaurant or other business can only be spent at that business or possibly its affiliates.
Prepaid cards are funded by adding money to the card. You cannot use a credit card to recharge a Visa or MasterCard branded prepaid card, but you can add funds with cash or a check. But you can buy certain types of prepaid merchant cards and gift cards with your credit card. For example, most restaurants and retailers will let you pay for prepaid gift cards with a credit card. Debit cards are funded by the bank account to which they are attached.
Debit cards are usually free, although some banks impose service fees. In most cases you will only have to pay if you overdraw your bank account and don't have overdraft protection. Prepaid cards branded as Visa or MasterCard usually have a monthly fee to keep the card active. You must have enough money loaded on the card each month to cover the fee.
Prepaid credit cards and debit cards both have limitations. A pre-paid card is limited to the amount of funds you previously loaded onto the card. Purchases will be declined once that limit is reached. Banks or credit issuer warns that prepaid cards linked to a specific merchant may have an expiration date. You will lose the money if it is not spent before it expires. Most of the time, a debit card is limited to the amount of money you have in the linked bank account. Some banks offer overdraft protection, so you may be able to tap into that coverage if you spend more than you have in your account. This may incur interest and fees.
Debit cards can be used for as long as you maintain your bank account. They usually have an expiration date, but your bank will issue a new card when the old one expires. Most prepaid cards can be reloaded after you spend the initial balance. You can keep reusing them as long as you keep adding more money.
بطاقة مسبقة الدفع تعتمد على المبلغ الدي تضعه فيها ويمكن استخدامها بعدة عملات رئيسية وتكون مفيدة جداً للمسافر ويضمن ان تكون نقوده في بطاقة وليست نقدي وان سعر الصرف ممتاز بالنسبه له.
Creating a fun-filled environment is the best way to stimulate self-reliance entice yourself to create your own savings. The plan includes the closest person to you, your partner or your spouse, you both can prevent one another if the chances of doubt come
When you are with them, you will be involved with your whole family. It's also a good idea to encourage with your friends to saving money.
At present, no matter how personal lives we talk about, but also our investment opportunities and how we can help each other. You can create a commitment savings to get yourself involved and disciplined yourself to save.
How does commitment saving work?
Commitment savings is a way to prevent yourself in which you cannot able to expend your savings. To do so, you need to involve a trusted friend to help you.
This friend decides if you can use your savings based on your agreed conditions. It will make it easier if you build a savings goal or contract date as a condition for withdrawing your savings.
Talk to this friend and explain your savings goal or defined date for commitment savings. He will limit your access to your savings as long as you cannot show the forecast enough that you have accumulated for your savings goal or beyond your agreed time.
Emergency cases may also be a condition of withdrawal such as accidents, medical emergencies, and other life-and-death scenarios. Otherwise, you cannot withdraw from your account.
You must also tell the amount you regularly apply to the bank and show proof of every deposit in your account. Make sure you only have your account in your name and do not need to open a joint account with that other friend.
Make it inspired the Financial Goal
Whenever you encounter trials, difficulties and temptations to save money, visualize yourself in situation to your financial goal. It is often effective in calming and continuity initiated.
I cannot emphasize what I mentioned earlier that your savings goal must be very clear and specific, so you can see you’re self-evident in its fulfillment. It is the best way of giving life to the will, and building inspiration and motivation.
i hope ADiB have a A stored-value card is a payment card with a monetary value stored on the card itself, not in an external account maintained by a financial institution. This means no network access is required by the payment collection terminals as funds can be withdrawn and deposited straight from the card.
If you’re growing your wealth, is it better to put the extra cash in your savings account, to add it to your emergency fund (so you won’t touch your savings in case you suddenly need money), or to invest it elsewhere?
The point is not growing your wealth but WHY you want your wealth to grow. Your “why” will clarify what kind of financial products you ultimately need. My advice is to make a financial plan to prioritize your financial goals. With each financial goal, match this with appropriate financial products and strategies that will make your dreams come true.
Having said that, here’s what you should do…
When you are building your emergency savings, you are increasing your protection against unforeseen events that could force you to take loans and bury you in debt when it happens. It is the first step toward wealth accumulation. So, the first step in wealth accumulation is to build your emergency savings.
Investing comes after you have mastered savings discipline. The first sign that you have savings discipline is building emergency savings equivalent to at least nine months of your expenses.
Learn how investment works while building your emergency savings to get a headstart. Of course, always keep in mind my first caveat above – know WHY you are investing – match your why with appropriate investment products as you learn more about them.
And before I forget, learn from a third party or disinterested persons or sources. Avoid getting information from brokers or agents whose ulterior motive is to sell you their product and earn commission – do your own research; learn from actual investors; read books and attend seminars from legit institutions.
Insurance that covered general check-up, and have dental insurance for the money smart card users, that can able to use the insurance when you deposit for your account in 6 months without failing, but ofcourse you can set how much need to deposit and how much the limit, and make other options.
Wages card can be introduced for low scale workers.
1. Salaries can be tracked by the UAE goverment to confirm if the worker is getting salary as per contract
2. Bank will get more clients
3. Instant wages kit for new boarding without visiting branch
4. Low scale workers will be benfitted with digital platform
This card will be like multiple currency other than AED it will be helpful for spending out with worrying when lost or stolen as money inside the card is what you put inside... Multiple currency with international exchange rate...