But, what type of credit account should you take to start re-establishing your credit worthiness? Well, you can always get a prepaid debit card. What is this debit card all about? How does it function? And how can you use a prepaid debit card wisely? Let us find out the answers to these queries.

What are Prepaid Debit Cards

Prepaid debit cards are card programs usually offered to those who have bad credit history and to those who are yet to establish credit. This is because some prepaid debit card issuers do not perform credit check on their applicants. Since they are usually offered to people with bad credit, these cards are also known as bad credit credit cards.

Still there are basic requirements for this program. An applicant should be at least 18 years old and with a stable source of income. The applicant should also provide some identification papers and a filled out application form. After filing these documents, the individual can instantly get approved for the card. He would just need to wait for the card to arrive via mail.

How Prepaid Debit Cards Function

Bad credit credit cards actually function like standard credit cards. A person can use his prepaid debit card to make hotel reservations, shop online, book flights and even rent cars! A bad credit credit card holder can also use his card wherever credit cards are accepted. He can use it to make purchases and even to pay monthly bills.

However, before you can use a prepaid debit card, you have to load money onto it first. The money you load on your credit card for bad credit will serve as your credit limit. But what if you go beyond your credit limit? If this happens, you can no longer use the card. Your future transactions using the card will be declined until you are able to re-load cash onto your card again.

Tips on Using the Card Wisely

1.Always check your account balances. Before using your debit card, check your account and make sure that you have available funds.  This will allow you to enjoy the continuous usage of your prepaid debit card. This will also help you avoid paying declined transaction penalties.

2.Allow the card to teach you basic budgeting. The premise of using a bad credit-credit card is to teach you to spend only within your means. Avoid loading a large sum of cash in your debit account as it can tempt you to spend on unnecessary items.

Instead, consider your monthly budget before deciding how much you can load onto your prepaid debit card. You may decide to use your card to pay for your groceries and bills. So you might as well put the funds allocated for these expenses onto your bad credit credit card. This way you can learn how you should manage your finances and card the right way.

We hope that this short overview about prepaid debit cards allowed you to appreciate what these cards can do. We also hope that the two tips we have listed above can help you see ways by which you can manage a prepaid debit card wisely.

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!

Below are practical tips and how to use a debit card for renting a car:

1. Check the car rental company’s policy. You can check the policy of different rent-a-car companies by checking out their website or calling the customer service number.  While some companies may strictly require a credit card, some companies may have more relaxed policies with regards to payments.

2. Be prepared to wait in line. Paying with a credit card gives you the option to pay online.  However, if you want to pay with a debit card, the car rental company may require more proof to verify your credibility.

3. Ask if you can pay with your credit card. Despite what is stipulated in the policy, some car rental companies may also accept debit card payment, if you make request.  Thus, it is always worth the effort to ask if you can use your debit card.

4. Be aware of “holds” and “blocks”. A lot of merchant impose a “hold” or a “block” to the cardholder’s checking or savings account to ensure payment.  Thus, aside from the cost of the rental service, you may need to reserve extra funds in your account which will be “frozen” or put on “hold” for 1 day to 14 days, depending on the company.

5. Make sure your debit card is compatible. Some merchants only accept debit cards with Visa or MasterCard logos.  If your debit card has different logo, you may want to check first with your prospective rent-a-car company if they accept such type of debit card.

6. See to it that you have good credit. Some people may not get approved for a regular credit card because of a poor credit history.  For this reason, rental-a-car companies do a credit check before accepting a transaction.  Take note that each time an inquiry is made in your credit report, it will also show up in your file.  Too many inquiries can send out a negative impression to prospective creditors.   Hence, if you are aware that you have bad credit, you may choose to pay in cash instead of using your debit card.

7. Prepare proofs of ID. Some rental car companies may ask to see proofs of identification such as auto insurance documents or recent utility bills.  The name that appears on these documentations must be the exact name that appears on your debit card as well.

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 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!

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!

For those who have the habit to overspend or finds it difficult to control spending, owning a credit card can pose a big problem. The best solution is to get a prepaid visa credit card instead.

Definition and Advantages of a Prepaid Visa Credit Card

Prepaid visa credit card is a Visa card you can use to make purchases everywhere Visa debit cards are accepted just like a traditional Visa card. It gives the cardholder a safer feeling because he/she does not need to bring cash especially when traveling to other countries.

The difference is that when you have a traditional Visa card, you can purchase items and pay them at a later time. On the contrary, you need to add funds first to your account before you can start using your prepaid visa card.

Below are other advantages of a prepaid visa card:

• You can avoid over-spending. You only get to spend what you have loaded on the card. Managing your finances is easier and you have full-control of your expenses.

• You can use it to withdraw cash from ATMs worldwide.

• You can easily make purchases everywhere as long as they are accepting Visa cards. It can be from stores, online or by phone.

• People who love to travel can use it to pay for booking fees, hotel reservations, etc.

• You can use it to pay bills and buy gas for your car.

• You can track your spending online.

How to Get a Prepaid Visa Credit Card

1. You can apply for prepaid visa card from your nearest bank or online. You will be charged a considerably low fee to open a prepaid account.  Application is quick and easy since no credit check needs to be done.

2. Register your Visa card in your name by telephone or online and establish an online account with your Visa card issuer.

3. Ask the issuer how you can activate your new prepaid visa card. Usually it is done by registering online or by telephone.

4. You will need to create a Personal Identification Number (PIN) so you can use your card at ATMs worldwide.

5. You can now use your new prepaid visa credit card to purchase items or pay bills. Check your balance at an ATM, by phone or on the internet. Reload your card so you can use it anytime.

Note: Some car rental companies do not accept pre paid credit cards so it is important to ask first if they are accepting prepaid visa cards. It is also important to note that some prepaid cards do not report to the credit bureaus. If you want to use your prepaid card for building credit, make sure that credit reporting service is provided.

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!