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!

1. Put your personal spending in check. Although you can only use your debit card if you have an available balance, there is still the tendency to spend your funds on unimportant purchases.  If you’re having trouble controlling your spending, avoid saving a large amount of cash in your debit account.

2. Monitor your purchases. To keep track of your spending, make it a habit to write down each purchase or each transaction you pay with your debit card.  Keeping a record of your transactions can help you manage your debit account more effectively.

3. Avoid overdraft fees. Although exceeding your limit is not allowed, there may be instances when your purchase is accepted even it exceeds your available balance.  However, you will be charged with an overdraft fee which can cost $30 or more.  Avoid such fees by checking your account first before making a purchase.

4. Look out for “holds”. Some hotels and rent-a-car companies may hold some of your available funds in exchange for a reservation.  In this case, you want to make sure that you understand the exact “hold” amount and how long it would be held by the merchant.  Better yet, you may consider using a credit card or paying the bill in full with your debit card.

5. Choose a strong PIN code. A recommended PIN code is a random combination of digits that has nothing to do with your personal information such as your birthday or anyone in your family’s birthday or your wedding date.

6. Check your account often. Be sure to check your debit account online regularly especially after making a purchase.  Check the exact fees that you incurred from the transaction.  The Federal Law protects debit cardholders from fraudulent transactions but only up to $50 and you need to inform your bank within two days after the transaction was made.

7. Do not link to your savings accounts. To be safe from fraud, it’s best not to link your debit account to your savings account.

8. Do not use your debit card for large purchases. If you plan to make a large purchase online, don’t charge it on your debit card.  Keep in mind that debit cards offer only a limited protection so you may not get much help in case there is a problem with your purchase.  Instead, use a credit card that offers a Fraud Liability Protection so you can have the option to dispute charges should you need to.

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!

Let’s take a closer look at the reward programs associated with debit cards:

Debit Cards with Cash Back Rewards

Just as cash back credit cards are a popular choice among consumers, debit cards with cash back rewards are an obvious favorite as well.  Usually, debit card issuers give 1% cash back or 1 point for every dollar worth of purchase.

For example, the debit cash by PerkStreet Financial offers1% Cash Back Rewards on Non PIN-Based Transactions. Pay Pal Debit Card also offers 1% cash back for every purchase as long as the cardholder is enrolled in the PayPal Preferred Rewards Program.

Merchant-Affiliated Debit Rewards

Some debit card issuers partner with merchants to offer more exciting rewards.  For instance, Chase has its own version of a cash back debit card called the Real Cash Rewards Debit Card which offers up to 3% cash back, depending on your monthly spending.  Chase debit cardholders can also earn up to 30% cash back on purchases made from more than 600 retailers that are included in the Chase Real Cash Mall.

MasterCard has also introduced the MasterCard Marketplace for both debit and credit cardholders.  The MasterCard Marketplace features different retailers that sell various products and services.  Mastercard debit cardholders are entitled to cash back bonuses by purchasing from affiliate merchants online.

Visa Debit card offers 3 cash back points for every dollar spent on partner retailers such as Staples, Expedia, BestBuy, Linens n’ Things and up to 20 cash back points on purchases made at selected stores like 1-800-Flowers, SmartBargains, and more.

Special Program Debit Reward Cards

Then there are debit cards that offer special reward programs that appeal to specific niches.  For instance, Citizens Bank has come up with the Green$ense cashback debit card which are sure to attract environmentalists. This debit card offers to give 10 cents for every paperless payment charged to the card.  Green$ense cardholders can earn up $120 each year, plus a monthly newsletter that includes tips for green living.

Choosing Your Cash Back Reward Debit Card

We have discussed the three major types of reward programs offered on debit cards.  Before applying for a debit card, make sure that the reward program matches with your personal lifestyle.  Understand the specific rules of the reward system.  More importantly, check the fees involved in using your chosen debit card to avoid unexpected charges.

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!

Pre paid credit cards, and their debit card counterparts, revolutionize the way people spend. Through these cards, people are able to spend only within their means. How is that possible? Well, by using these cards, cardholders are required to load cash first onto a prepaid debit card or credit card before they could use their prepaid cards for purchases, cash withdrawals and even reservations for hotel accommodations and car rental services. Once the fund loaded onto the prepaid card runs low, all future purchases and payments will be declined, and this will prompt the cardholder to load cash again to his credit or debit card.

Though some prepaid cards are known to have fees and charges, a lot of people recognize the value of switching to these cards. As we all know, a credit card holder is prone to overspending because of impulse buying and lavish shopping sprees. In the end this individual may find himself with lots of debts, which, most of the time, is very difficult to pay completely. By using a prepaid debit card, an individual could easily control and monitor his expenses on purchases and ensure that he does not fall into a debt trap.

A lot of parents are also acknowledging the importance of these prepaid cards. A growing number of parents apply for these cards and provide their teen agers prepaid debit or credit cards. In so doing, these parents are able to provide their growing kids access to plastic cards while also retaining control over the way their children spend the funds loaded onto the prepaid cards they hold on to.

But is it difficult to apply for these prepaid cards?

Well, applying for these cards is very much similar to the method used in opening bank accounts. You need to provide important documents like proof of residence, contact information and identification cards. Then you could choose any of the three platforms for applying for these prepaid cards. You could choose to apply over the phone, online or through a personal application. After applying, you will be asked to wait for the prepaid cards to arrive via mail, and once activated and loaded with cash; you could soon enjoy the benefits of your own prepaid debit or credit card.

So we hope that you have gained much insights and information regarding prepaid debit cards and prepaid credit cards.

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!

Tip 1: Avoid the Costliest and Most Frequently Incurred fees. – This requires an individual to look closely at the fees and common charges imposed on prepaid debit cards. To get the right prepaid card, you need to look for cards which do not require transaction fees, charge less than $5 for maintenance fees, and charge at most $5 for loading fees. By taking these fees and charges into consideration, for sure you will be able to find a prepaid debit card or credit card that will not devoid you of much of your savings and income.

Tip 2: Look for a prepaid card program that provides an online feature of managing your credit and purchases. – A lot of credit companies and banks provide online platforms for checking and monitoring your prepaid cards. So, make sure that the card you are applying for provides this special feature so that you could be assured of knowing how you spend the money you load onto your prepaid cards and determine the status of your prepaid account.

Tip 3: Make sure that the prepaid debit card you will get is accepted everywhere. -  Make certain that the prepaid card that you select is backed by major card networks such as Visa and Mastercard. It is important so that you could be assured of having your prepaid card accepted in most Automated Teller Machines (ATM’s) and commercials stores and shops worldwide.

Use these helpful tips and soon you will be able to locate the right prepaid card that will suit your needs and provide you much convenience. By then you will realize the significance of being diligent, inquisitive and rational enough in choosing for yourself the right prepaid credit card or prepaid debit 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!

Https://. To ensure the security of a web site, make sure that the URL or the website address begins with https://.  You should be able to check this from your browser’s address bar.

Privacy Policy. An online merchant must present its Privacy Policy on its website.  Take the extra time read this important information.  Because every merchant has its own set of policies on protecting their customer’s rights to privacy, you should be clearly aware of how your personal information will be used and what you can expect from the merchant.

Merchant Reputation. It is strongly recommended that you purchase only from trusted merchants online.  Get to know the company’s background and reputation.  Although you can find online stores that offer incredibly low prices, you want to make sure that you are dealing with a legitimate seller who only sells high-quality products.

Seal of Approval. Look for online shops that bear logos or seals of approval from National Business/Merchant organizations like the BBB (Better Business Bureau) and TRUSTe.  Take the extra effort to check the merchant’s record from the BBB.

Fraud Liability Protection. Does your debit card Issuer provide you protection against fraudulent or unauthorized charges made using your account?  Prepaid debit cards by Visa and MasterCard comes with this provision as their standard credit cardholders do.  If you are not sure, review your debit card’s Terms & Conditions before using your card online.

Purchase Protection. What about purchase protection?  For instance, prepaid debit cards with the VISA logo requires online verification before the cardholder can continue with the purchase.  This gives VISA cardholders additional security against fraud.

Check your bill. Review your debit card receipts to make sure that all charges are correct.  If you find errors, call your debit card company immediately.

Check out fees. Some prepaid debit cards carry so many extra charges on every transaction you make, including online purchases.  Before using your debit card to buy from the internet, review the fine print and get to know the possible fees that you may incur.

Check your funds. Make sure that you have sufficient balance in your account to pay for that particular item.  Some debit cards charge overdraft fees and other penalties in case your purchase exceeds your limit.

Do not share your PIN with anyone. You will be required to enter your debit card’s Personal Identification Number (PIN) when making purchases both online and offline.   Never let the cashier or anyone else enter these numbers for you.

Do not use your debit card account for savings. Limit funds in your debit card account and avoid making large deposits.  This way, in case your account gets hacked, it will not be a heartbreaking loss for you and you can always switch to a new account.

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!

Nevertheless, owners of debit cards must be cautious about the possible penalty fees associated with their prepaid card use. What you thought was a $50 worth of purchase may suddenly cost you $80 or more due to the extra costs. What are these penalty charges?

Below is a list of debit card fees to watch out for:

Negative Balance Penalty. You can only use your debit card for payment as long as you have an available balance in your account. However, there are instances when your bill may exceed just a little over your available balance. In this case, your transaction may still be accepted but you will be charged with a penalty fee.

Decline Charge. Again, prepaid debit card holders are not allowed to overdraw. Hence, if you try to make a purchase that is way too large than your available balance, your transaction will usually be declined and you will be penalized for trying.

Daily Limit Penalty. Some prepaid debit card issuers impose a limit to the amount of transaction you can make each day. Going beyond that could mean additional penalty fees.

Inactivity Fee. Not using your debit card within a specified time period may also cost you additional charges.

Customer Service Charge. Some Issuers may not provide assistance for free. Other may provide one free live customer call each month but may charge a fee for corresponding calls (may range from $0.50-$2.00 per call) So before calling your debit card’s hotline number, check how much you will be charged.

Account Termination Penalty. Are you planning to close your account? If yes, your debit card Issuer may penalize you for terminating their service ($15 or more).

Card replacement. If you lose your debit card, there is usually a fee to ask for a replacement card. Visa and MasterCard may charge you $10 for this.

ATM Balance Inquiry. Do you want to inquire your balance? Watch out! Checking from your nearest ATM may cost you anywhere from $0.50 to $1.00, depending on your debit card type.

Currency Conversion. Currency conversion rates are not just applicable to regular credit cards but to prepaid debit cards as well. Hence, before using your prepaid card abroad, check the currency conversion rate. For instance, Visa Prepaid Debit Card charges 2% while MasterCard Debit Card charges 2.95% currency conversion rate from the total amount of purchase.

Choose and Use Your Debit Card Wisely

Just as it is important to check the fine print before signing for a credit card, you also need to do some investigation when choosing a debit card. More importantly, you need to familiarize yourself with your privileges and limitations to avoid spending more on penalty and maintenance debit card fees. Even though it is far easier to get a debit card, take the extra effort to read the Terms and Conditions.

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!