Prepaid Credit Cards

Some people find that they can’t get accepted for a credit card because of a poor credit score or a sketchy credit history. This severely limits their options when traveling, shopping online and many other things. A major credit card is required to rent a car, check into a motel, make online purchases or buy an airline ticket. A person with poor credit can still do all these things, though, if they have one of the many prepaid credit cards.

Prepaid credit cards are a very smart way to build your credit back up and create a good payment history. All you need to do is make a deposit to the account, much the same way you would with a checking or savings account. Once the money is there, you can use your credit card until you’ve depleted the money you’ve deposited.

There are a lot of advantages when you have prepaid credit cards. You can charge as much as you want as long as you have the funds in the account. You’ll never be in debt because you’re using your own money, not someone else’s and you’ll never pay interest!

On the other hand, prepaid credit cards will cost you some money. There is a fee to set up the account initially, usually about ten dollars. You’ll also be charged a fee whenever you make a deposit to the account. These fees are usually small and not an unreasonable price to pay if you need a credit card.

Another advantage of using a prepaid credit card is privacy. Whatever you purchase isn’t reported to any polls or federal agencies. If your privacy is important to you, a prepaid credit card is a great thing to have. There are also some companies that provide prepaid credit cards and also report monthly to credit agencies, thus building up a positive credit history for you.

Another type of prepaid credit card can be found at grocery stores and pharmacies. Much like a gift card, they come in varying amounts and you won’t be paying a fee like you do when you set up an account. They work just like the prepaid credit cards but you don’t get your activity reported to credit agencies so don’t build a good credit history. Another disadvantage is that every time you buy one, it’s a different account number. If you’re using prepaid credit cards to maintain an internet subscription or some other monthly expense, you’ll have to change that number in their records every time you make a monthly payment.

Some prepaid credit cards allow you to load them with several thousand dollars but some also have rather low limits. Most of them have a limit of how much you can load at one time so depending on what you want to use it for this is a very important item to consider.

Prepaid credit cards are a good way to build a positive credit history, avoid debt and enjoy the convenience of making purchases without having to handle cash.

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