SubscribeWhat are Prepaid Credit Cards?
PrePaid Cards are unlike regular cards, since no credit is offered by the card issuer: the card-holder spends money which has been “stored” via a prior deposit by the card-holder or someone else, such as a parent or employer. However, it carries a regular card brand (Visa, MasterCard, American Express or Discover) and can be used in similar ways just as though it were a regular card. Simply deposit money into your prepaid card account and away you go!
Five Reasons To Apply for a Prepaid Card
– Convenience
Pretty much everyone needs a credit card these days and once you have money in your account, you can use a prepaid card anywhere you would use a regular card.
– Financial Discipline
A lot of people are worried that they may be tempted to run up large debts and unfortunately many people do exactly that. There are no such dangers with a prepaid card. You can only spend up to the amount you have already prepaid on the card.
– Budgeting for Teenagers
Perhaps your child mainly shops online or would prefer not to carry cash but due to a lack of any credit history they can not apply for a regular card. (And, let’s face it you probably wouldn’t want them to have one anyway). Paying their allowance (or part of it) onto a prepaid card could be a great answer. And, it can be a great way to teach them basic budgeting. They can also be given as gifts allowing your difficult to please teenager to choose exactly what they want.
– Budgeting for Students
Students often need credit cards for a variety of reasons. They make it easier to purchase a variety of goods and services and are great to have on hand in case of an emergency. But maybe they’re not quite ready for a regular card. A prepaid card is just what they need.
– People with poor or bad credit
Some people are unable to apply for regular cards because of poor or bad credit thereby denying them the advantages and convenience of a regular card. A prepaid card could be the answer. You’ll be able to do all the things you can with a regular card without having to worry about running up further debts.
Importantly, most prepaid cards report to at least one of the major Credit Bureaus allowing you to re-build your credit rating.
Advantages of a Prepaid Card
The best part about a prepaid credit card is that you can use it as much as you want (up to the amount currently deposited on the card) and you won’t be in any debt. The money is yours anyway and you can’t spend more than your limit without making another deposit and there no charges apart from a small fee to set up the account and make further deposits.
Dave Nichols owns CardsWithRewards a website dedicated to finding the right Credit Card for you! To find out more about Prepaid Cards and view card comparisons visit the site today!
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