Prepaid Credit Card Advantages

Easy Access. Because no credit check is done, anyone can get a reloadable prepaid card at any time.

Budget Friendly. Do you have a problem with overspending?  With pre paid credit cards, spending can be put in control more strictly since you can only use it if you have an available balance in your account.  Once your available funds have been used up, the card must be reloaded with cash before it can be used again.

Avoid Bad Debt. A prepaid card does not provide a credit line so the risk of incurring bad debt can be avoided.  There is no need to worry about paying the interest rate or late penalty fees which can cause debt build-up.

Convenience. Reloadable prepaid cards are great for people who are always on the go.  If you’re a frequent traveler, you can simply take your card with you instead of bringing a huge amount of cash.  Parents who have college kids who stay at boarding schools can send allowance though prepaid cards.

Prepaid Credit Card Disadvantages

Although there is no interest rate or late penalty fees, there are other costs associated with reloadable cards that you should watch out for.  Find a prepaid card with reasonable fees by checking out comparison websites online.  What are the costs that you should know about?

Upfront Fee. Although no credit check is required, most Issuers require the submission of an upfront payment.  Sometimes the fee is known as “application fee” or “activation fee”.

Maintenance Charge. Prepaid cards usually carry an annual fee.  However, aside from the annual fee, you may also be charged with a monthly maintenance cost or “service charge” to keep your account active.

Reloading Charges. Some Banks may impose an additional fee each time you make a deposit in your prepaid card account.  In this case, it is a good idea to find a prepaid debit card Issuer that will not charge a reloading service.

Purchase Fees. Generally, there is a purchase fee for each transaction you make.  It does not matter whether you made the purchase from a regular store or online.  You can still be charged a minimal fee  for every purchase.

Card replacement and renewal fee. In case you lose your prepaid card, there is a fee when you request for replacement.  Also, the issuance of a prepaid card is often good only for a certain time period.  When your card expires, you must pay a fee for the card renewal.

Yes, there are advantages with using pre paid credit cards.  However, before getting one, consumers must make sure that there will be no hidden costs or unreasonable charges associated with their chosen card.

About the Author

Tara Tiemann is a credit analyst of Go-prepaid.com and has been a resource site for people who want to live debt free! If your on a budget using prepaid debit cards, pre paid credit cards and prepaid cell phone service can save you big money!

Basic Fees Associated with Prepaid Cards

Activation Fee. Activation fees can range from $9 to as much as $100, depending on the issuer and the type of prepaid card.

Negative Balance Fees. Normally, debit cardholders are not allowed to overdraw.  However, there are cases when your bill can exceed your available balance, and you will be charged with a negative balance fee.

Decline Fees. Since overdraw is not allowed, your transaction will be declined if you try to use your debit card for payment without sufficient balance in your account.  However, you can get penalized with decline charges.

Daily Limit Fees. Some issuers impose a daily limit or a maximum amount of charge per day.  Thus, once you reached that limit, your transaction can still be declined even if you have existing funds in your account.

Cash Advance Charges. You can withdraw cash from your debit account using an ATM.  However, you can also incur cash advance charges.

Reloading Fees. If you reload your debit card by making a direct deposit, no extra fees shall be charged.  However, if you try to reload using other services, you may incur an additional reloading charge.

Additional Charges. Some gas stations, restaurants, hotels and car rental service who accept debit card payment may impose a “hold” or extra charge on your bills.

ATM Balance inquiry. There can be a minimal fee of $1 or less each time you check your balance from the ATM.

Maintenance Fees. Some prepaid card issuers charge a monthly maintenance cost, aside from the yearly activation fee.

Inactivity Charge. You may also get penalized if you fail to use your debit card on any transaction for more than 60 days.

Customer service Fee. Before calling your debit card’s Helpline, make sure that you understand the possible fees you can incur.  Not all issuer provide a free helpline.

Transaction Charges. Most prepaid debit card issuers will charge you an additional cost for each transaction you make- be it offline or online.

Account termination fee. If you want to close out the account, you can be charged with a termination cost as well.

Card replacement. In case of lost, you must pay a fee if you request for a replacement.

Card renewal. Your prepaid card will expire after a certain period (usually three years or longer).  After that period, you will pay an extra fee for requesting a new card.

About the Author

Tara Tiemann is a credit analyst of Go-prepaid.com and has been a resource site for people who want to live debt free! If your on a budget using prepaid debit cards, pre paid credit cards and prepaid cell phone service can save you big money!

Prepaid Credit or Debit Cards for Everyone

Issuers of prepaid debit cards give everyone the chance to use plastic money without going through a complicated approval process. Unlike standard credit cards that require good credit history, credit check is not necessary to get a debit card. All that is required is an advanced deposit which will be used for payment.

Just like a regular credit card – you can use it when buying groceries, shopping at malls, paying utility bills, or purchasing from online stores. As long as you have available funds in your account, you can use it to pay for your charges.

Prepaid Debit Card Limits

What makes a prepaid card different from a real credit card? First, we must understand that a debit account does not come with a credit line. Each time a debit card is used for payment, charges are instantly paid off using the deposit in the cardholder’s account.

For instance, if you have made a $300 deposit, you can only use your debit card for charges up to $300. If you want to continue using it for more, you must make a new deposit in your account.

Prepaid Debit Card Advantages

Generally, prepaid debit cards are accepted anywhere credit cards are accepted. Most merchants allow both credit and debit card payments. This is especially true if your prepaid card bears the Visa or MasterCard logo.

Prepaid debit cards are great for people who are often on the road or on trips abroad. Instead of bringing a large amount of cash, they can use a debit card for most of their travel expenses. Students can also benefit from prepaid debit cards since it prevents them from incurring bad debt. For parents, they can conveniently send cash to their kids through their prepaid accounts. Even employers who hire home based employees or freelancers can use a prepaid debit card to send wages or service fees.

Although some people may frown at the thought of not being extended a credit line, those who want to control their spending will find this limitation as a blessing. And because you are not allowed to go over your limit or to pay at a later time, extra fees such as interest rate, overdraft fees, late penalty fees, and other credit card surcharges are completely eliminated.

About the Author

Tara Tiemann is a credit analyst of Go-prepaid.com and has been a resource site for people who want to live debt free! If your on a budget using prepaid debit cards, pre paid credit cards and prepaid cell phone service can save you big money!

However, there are circumstances that may lead us to bad credit. It is not always because a person has an over-spending habit. Sometimes bad credit is a result of an unexpected events such as illness, divorce, lost of job, etc. Whatever the reason is, there is still a chance to repair a bad credit history.

Secured Credit Cards

Some people may think that getting a new credit card to recover from bad credit is a wrong move. Yet, if done the right way, it can actually be an effective step to rebuild bad credit.

Credit cards for people with bad credit? Yes, this is possible. Many credit card companies are offering bad credit credit cards or secured credit cards.

A secured credit cards are just like a traditional credit card in the sense that you can use it for making purchases or paying bills. However, you must deposit a sum of money which acts as security for your debts. If you cannot pay on time, the bank will use your cash deposit to pay off your debts. The amount you deposited will act as your credit limit as well.

How Secured Credit Cards Increase Your Credit Score

Most secured credit cards offer credit reporting to the three (3) major credit bureaus. Paying on time and avoiding exceeding your credit limit will surely improve your credit rating. Be sure to understand how you are being scored so you can work on the improvement of your personal credit history.

How to Apply for a Secured Credit Cards

The easiest way to look and apply for a credit card for bad credit is to search the internet. Most credit card companies offer online applications making the application processes faster and easier.

Disadvantages of Secured Credit Cards

Due to the high risk involved, most credit cards for bad credit come with higher fees and interest rates. There are credit card companies that charge application fees, processing fees and annual fees.

Is it worth getting a secured credit card if you have bad credit? Yes, it is. Despite having to pay higher fees and interest rates plus submitting a deposit, secured credit cards can really help you repair your credit history.

With regards to higher fees and interest rates, you just need to shop around for choices and compare your possible options before choosing the best deal. Remember to always make payments on time to avoid penalties and incurring negative remarks on your credit report.

About the Author

Tara Tiemann is a credit analyst of Go-prepaid.com and has been a resource site for people who want to live debt free! If your on a budget using prepaid debit cards, pre paid credit cards and prepaid cell phone service can save you big money!

However, they can apply for a secured credit card in order to fix their credit Before submitting your application, here are some important facts you need to know about this card:

Fees:

This type of card may involve fees such as processing fees and annual fees. Such charges may also vary from one credit card company to another. You need to check the fees before applying so you can avoid credit cards with very high charges.                                                          

Deposit:

Secured credit cards require a cash deposit which can range from $300- $500. There are secured credit cards with minimum and maximum deposit limits. Some issuers may place your cash deposit in an interest-bearing account. It that’s the case, see to it that you clearly understand the terms of your credit card issuer.

Your credit limit can either be the same as or exceed to the value of your deposit. However, there are instances when your credit limit may be less than your security deposit.

You can add money to your deposit so as to raise your credit line. As an incentive for being able to pay on time, some banks may increase your credit limit after a few months of consistent payment. The cash deposit will be used by the credit card issuer in case the cardholder fails to pay off charges on time.

Qualifications:

For those who want to apply for a secured credit card, the requirements may vary from one company to another. Aside from the security deposit, some credit card companies may impose specific qualifications on age or income bracket.

Payment Reports to the Credit Bureaus:

There are times when the card company does not report your payments to the three major credit bureaus and in such case, it does not help rebuild your credit rating. If you wish to rebuild your credit history, your payments should be reported to the credit bureaus.

Unsecured credit cards have lower fees, fewer restrictions and lower interest rates. Now, if you want to upgrade your secured credit cards to an unsecured credit card, it can be possible after a year of consistent payments.

About the Author

Tara Tiemann is a credit analyst of Go-prepaid.com and has been a resource site for people who want to live debt free! If your on a budget using prepaid debit cards, pre paid credit cards and prepaid cell phone service can save you big money!

• Understand the terms and conditions of the credit card company. Before signing up, you have to read the fine prints first in order to avoid unpleasant surprises later on.  You need to verify some important information: the length of grace period, the rate of interest, credit limit, charges, and the other details of the offer.

• Check your lifestyle and need for credit. If you are getting secured credit card to fix your credit rating. You must choose a card that matches your lifestyle.  If you do not need to use your credit card on large purchases, choose one with a lower credit limit.   

• Compare different types of cards in order to find the best card for you. There are lots of companies offering secured credit cards, and every company has their own set of rules. You have to carefully compare credit cards to find the one that suits you best.

• Period to wait to qualify for an unsecured card. Secured credit card holders can qualify for an unsecured credit card after a year of consistent payment.

• Verify if they’re reporting to the main credit bureaus. This is very important if you are attempting to reestablish your credit history.

You have to make sure that your chosen secured credit card company reports your payments to the major credit bureaus to have your credit report updated.

• Research for more information. Every 6 months, the Federal Reserve publishes a survey of credit card terms. There are various websites over the internet where you can compare offers.

These are just some of the important points that you have to think about before applying for a secured credit card. All secured credit cards may not be the same, and so, it is important to compare them to make sure that you’re signing up for the right one. This can also serve as your stepping stone to get approved for an unsecured credit card.

About the Author

Tara Tiemann is a credit analyst of Go-prepaid.com and has been a resource site for people who want to live debt free! If your on a budget using prepaid debit cards, pre paid credit cards and prepaid cell phone service can save you big money!

Incentives

There are some that offer extra load when you refer a friend to apply to the same debit card company.

Easy application process

Everybody who wishes to apply can be legible, even those with poor credit history are entitled to apply. No background check, employment verification nor credit history check to undergo. The application procedure is lax unlike from credit card because their basis is on the money that will be deposited, so the approval is assured.

Security

Entering a credit card number on the internet can be very uncomfortable. Using a prepaid card is a lot safer because aside from already been accepted as a mode of payment online, the crooks can only get the value that has been loaded on the card. You feel secured using the prepaid card whether online or in person.

Better than cash

Bringing huge amount of cash in malls or anywhere can be uneasy. It can also be too enticing for those who have bad intentions, if they see that you’re bringing all those cash in hand. Another thing is that if your cash is lost, then it can no longer be returned back to you. But if you’re debit card gets misplaced or lost, you can still replace a new card.

Convenience

Debit cards, like credit cards, have been widely accepted anywhere: malls, grocery stores, online, restaurants and gasoline stations. You can also pay (either online or by phone) your bills such as utility bills, phone bills and other bills that you have to make. In some cases, they more accepted than credit cards.

Controlled spending

Spending is more controlled with a prepaid card because it depends on how much is the load. Compared from bringing cash, it is also easier to keep track the money when your card is used. If it’s already empty when you’re about to make payments, the transaction gets automatically declined.

Develop financial responsibility and discipline

It teaches how to use and handle money responsibly. When doing purchases on the internet, it is easier to track where the money was spent. You can see the transaction history online and you can also do it by phone. So, you can be sure that you won’t lead into any kind of debts. Overspending is impossible to be experience with prepaid debit cards because of the limited balance. This certainly is a skill that can be developed with debit card and not with credit card.

The procedure when purchasing is almost same as using a credit card. Once you’re at the cashier, you hand your card to the clerk, sometimes they ask you to sign on the receipt, then your card and the receipt is given to you. Then, you’re done. This card when used for purchasing,is not as risky as a credit card and the process of application isn’t that complication.

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About the Author

Tara Tiemann is a credit analyst of Go-prepaid.com and has been a resource site for people who want to live debt free! If your on a budget using prepaid debit cards, pre paid credit cards and prepaid cell phone service can save you big money!

Having poor credit rating raises doubts to your capacity to pay debts. Naturally, credit card companies are looking for those who can pay off their debts on time and with a great credit history to prove it.

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Good thing, those who have poor credit rating may apply for prepaid credit cards. There is no background check or credit check conducted upon review of your application. The application procedure is a lot more convenient than applying for a credit card. Issuers of prepaid debit cards does not care about your credit standing. In fact, a prepaid card can be used to rebuild a bad credit. How can that be possible?

Prepaid Debit Cards and Bad Credit

Today, you can have a debit card that does payment reporting to the three major credit bureaus. Thus, as you use your prepaid card for purchases, you are also improving your credit rating.

You can go online and do research on various prepaid credit cards advertised in the market. Compare different debit cards before making a choice. Consider these important pointers:

• go for one that best suits you and your needs
• go for those that report to the major credit bureaus
• go for the one with reasonable fees

Owning a debit card can be a great way to control your spending. Set a specific budget each month and stick with the plan. Before using your debit card, check your available balance and carefully consider whether you really want to spend it for that particular purchase or save it for more important buys.

Unlike credit cards that allow you to shop now and pay later, you can only use your prepaid debit card if there are available funds in your account. This limitation prevents debit cardholders from damaging their credit or getting stuck in bad debt. Also, there is no need to think about over-the-limit charges, over draft fees, late charges, and interest rates.

Yes, you can apply for a debit card to rebuild your credit rating one step at a time. Once you have proved your credit worthiness, that’s the time you can apply for a regular credit card with good rates.

About the Author

Tara Tiemann is a credit analyst of Go-prepaid.com and has been a resource site for people who want to live debt free! If your on a budget using prepaid debit cards, pre paid credit cards and prepaid cell phone service can save you big money!

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The pros of using a pre paid credit cards:

• Using this kind of card enables you to make purchases without cash. However, it reduces the risk of overspending because the limit depends on the amount of money deposited in the account.

• This card can be used worldwide so if you are a frequent traveler, a prepaid card is safer to carry than cash.

• There is no need to pay credit card bills.

• The procedure for the prepaid debit card application is not as complicated as when applying for a credit card.

• There are no interest fees involved.

• Prepaid cards are can be recommended for those with bad credit history. It can be used to improve a poor credit score.

• Unlike a credit card in which you can swipe now and pay later, you can only use your prepaid debit card after making a deposit in your account. Thus, it helps the cardholder exercise control over his/her spending.

The cons of using a pre paid credit cards:

• You cannot use your pre paid credit cards for payments unless you have existing funds in your account.

• The setup fee for this kind of card can be quite costly.

• There are fees involved for each transaction. Each time you use your prepaid card for payment, you are charged with an additional fee for processing the payment.

• Some prepaid card companies charge certain that can increase over time.

• Not all issuers provide credit reporting to the major credit bureaus.

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About the Author

Tara Tiemann is a credit analyst of Go-prepaid.com and has been a resource site for people who want to live debt free! If your on a budget using prepaid debit cards, pre paid credit cards and prepaid cell phone service can save you big money!

Whether you have bad credit history or no credit history, you can surely get approved for one. But before signing up and submitting your online application, here’s what you should do:

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1. Don’t make decisions hastily.
Even when you need a credit card in a hurry, you should spend time comparing your choices. Remember that you are guaranteed to get an approval so you want to make sure that it’s the credit card you want.

2. Don’t submit too many credit card applications.
Too many inquiries from different issuers raise doubts about your credit worthiness. Don’t try your chances by submitting multiple applications to credit card companies at once.

3. Prepare a repayment plan.
Because it’s a secured credit card, you can expect to get approved right away. However, have you thought about how you plan to manage your account? Have made adjustments on your spending habits to avoid uncontrolled debt?

4. Consider other options.
You may also use a department store credit card or a gas station credit card to rebuild your credit rating more quickly. These credit cards can be used for purchases but you are expected to pay your full balance each month.

5. Be determined to pay off your balances completely.
The best way to rebuild bad credit is to use your secured credit card regularly. Avoid the interest rate by paying in full and making your payment on time. Before using your card for any purchase, think about your repayment plan.

6. Read the contract before signing.
Issuers of secured credit cards have different terms and conditions. Don’t assume that what you read from one company’s page will be the same as the others. Aside from the fees and interest rate calculations, you want to pay attention to the disclosures and limitations.

About the Author

Tara Tiemann is a credit analyst of Go-prepaid.com and has been a resource site for people who want to live debt free! If your on a budget using prepaid debit cards, pre paid credit cards and prepaid cell phone service can save you big money!