And Finally ...

7. Limit your spending by adding only the money you have budgeted for specific purchases -- say, $600 a month for groceries, and $400 a month for restaurants -- onto the designated prepaid card. "If we put $200 on our prepaid card for groceries, we know we have to make it last until our next payday. If we have $50 budgeted for restaurants and we spend it all, we know that we're not going to be eating out again until we get paid," says Young.

8. Load your kids' allowances or college spending money on prepaid cards to teach them smart money habits and allow them to graduate college without crippling credit card debt. "This is a great tool to teach them how to budget and spend for the Facebook generation. This is how transactions are done today, and it's a great, safe way to teach younger people in your family about budgeting and spending effectively," says Tramontana. Plus, both you and your child get to see how and where the money is being spent.

9. Keep nosy credit card companies in the dark about "questionable" charges by using your prepaid card (in lieu of a credit card) at secondhand clothing stores, tire retread shops or anywhere else your credit card issuer might frown upon. Credit card issuers increasingly are using purchasing data to determine whether you are a good credit risk or not. This purchasing data can then be used to increase your credit card's interest rate, reduce your credit limit or both. For example, if you used to use credit cards to shop only at high-end stores but have had to cut back and now use your credit card at Goodwill and Wal-Mart, your credit card issuer is watching. To protect your credit, you may want to switch to cash or prepaid cards instead.