Business and Finance

Posts Tagged ‘Prepaid Credit Card’

Life can be pretty difficult if you happen to be in the unfortunate position of having less than perfect credit.The fact that credit is almost impossible to get even if you really need it is bad enough, but, life in the USA today without a credit card is nigh on impossible. Booking a hotel room, hiring a car, buying products online, hiring equipment and many other straightforward activities require a valid credit card with no “if’s or but’s”.

Many people have been in this position but have managed regain decent credit scores through the use of prepaid credit cards. The great thing about prepaid cards is that there are generally no checks or qualifications required – no credit score, no employer contact and no guarantors required. In a nutshell anyone can get a prepaid card, they simply have to deposit funds to provide the credit limit required. Essentially it is a debit card as no credit is offered. However it can be used in any outlet or retailer, on or offline, that accepts conventional credit cards.

It is a little known fact there are prepaid card companies who report on the conduct of your card to credit bureau’s and therefore can have a positive impact on your credit score over a period of time. If you want to improve your credit profile it is important to make sure the card issuer will report to a credit bureau. If this is not the case then the prepaid card will have no effect on your credit score whatsoever.

As with all financial products aimed at those who have credit problems there are usually fees attached with usage. Make sure and compare these cards on a like for like basis prior to committing yourself. Most companies will charge a fee for issuing the card or opening the account in the first place, this fee is usually an annual charge of anywhere from $30-$100. Then they also charge fees every time card is used to make payment or withdraw funds from ATM. Some even charge for loading funds onto the card itself!

Prepaid credit cards generally do not come with benefits like air miles or reward points, but occasionally prepaid companies will offer such benefits to increase their customer base, so if you come across such offers it is generally a good idea to take advantage of them as long as you are not being charged excessive fees for the privilege.

Another point to consider is how easy will it be for you to put credit on the card? A good prepaid card will have arrangements with many nationwide institutions across the country making it simple and convenient to fund the card, some will even allow you to fund deposits directly with your paycheck!

Why not a pre-paid credit card? It’s a well tried and tested concept after all and quite straight forward. We’re all used to prepaid phone cards, prepaid gift tokens and prepaid gas and electricity meters. The prepaid credit card simply takes the same logic a further step forward, with the added novelty of it being a “credit card without debt”! For those who have struggled to keep spending on their “plastic” within reasonable bounds, prepayment could represent a heaven-sent opportunity to finally knock their domestic budget into shape.

In fact, it’s probably something of a misnomer to call it a prepaid credit card, since no credit is involved and, therefore, there’s never any interest to pay. Whenever you use it (in exactly the same way you would use any of your other plastic), you’ll only be spending money that you’ve already loaded onto your prepaid card. So, there’s never any danger of getting into any debt on a prepaid card.

You load money onto the card in much the same way as any other prepaid facility – namely, by cash, by bank transfer or by using another credit card. Since your prepaid credit card is also a MasterCard or Visa, you can use it anywhere that MasterCard or Visa is accepted, at home or abroad. Using it abroad, of course, would give you a very handy and rather more convenient alternative to carrying travellers’ cheques – with the added reassurance that it’s not going to let you overspend on your holiday money! Furthermore, if the card is lost or stolen, you can simply contact the issuing company, and they’ll send a replacement.

The prepaid card offers the same protection against fraud as regular credit cards. So if you use it to shop online or over the telephone and the card’s been used fraudulently, you can recover the loss. A card also offers greater safety than cash when it comes to carrying it around, so it could be an appropriate alternative for use by children or the more vulnerable (the jury’s probably still out on this one though, and many issuers still limit the use of prepaid cards to those over the age of 18).

As you can imagine, the issuing companies love the idea of a prepaid card, since your use of them is practically risk-free. There’s no need to check your credit status or history, so prepaid credit cards are issued more or less on demand.

So, is there a catch? Not so much a catch, as the relatively high cost at the moment of using a prepaid credit card. Because they’re a relatively novel idea, competition in the market has probably not yet brought the costs as low as they might become. In the meantime, therefore, you should make your choice of card-provider on at least some of the following considerations:

* Will you be charged for simply opening a prepaid credit card account?

* Is there a monthly service charge, and, if so, what exactly do you get for it?

* Is there a charge each time you want to load credit onto the card?

* Will the places that accept your cash to top-up the card also charge for that service?

* Is there a charge for using the card or withdrawing cash on it, including internet purchases?

* Will you be charged for having the card sent to you by express delivery?

* Is there a charge for closing your account?

* Will you be charged for replacing the card, in the event that it is lost or stolen?

* Do you have to pay a fee each time the card is renewed (i.e. upon each expiry date)?

There are times when parents would go ballistic when they get their teenage kids credit card bills. Giving someone without financial control over their lives a credit card is like opening up a toy store or a candy store to a kid. Unless you want to have a bad credit rating, get yourself a prepaid credit card instead.

Prepaid credit cards can help in several ways. For example, the holder can control some personal expenses and allowance. It assists the card holder to promote the flexibility to pay over some telephone bills, internet use, restaurant consumption, shopping expenses and even paying training fees.

Most of the prepaid credit card application process is very straightforward. By using prepaid credit cards the you know exactly what you can afford and not go overboard on the spending.

As its name implies, prepaid credit cards have credits on them already because they have been, well, prepaid. A person puts money into the credit card account and he can only charge the amount what is in the account.

The holder can load prepaid credit cards anytime they want, and when making a purchase, the cash should be in the account and credited already to avoid embarrassment in the shop or store or restaurant.

Prepaid credit cards can be the best solution for your financial needs and purchases. Here are some reasons:

o The prepaid credit card can keep the holder away from huge debt because the holder will only spend his own money.

o Unlike other form of credit card, the prepaid credit cards do not encourage the holder to spend too much money that they do not have nor can afford. With a prepaid credit card, the holders need not to worry anymore about overspending because they will be stopped from purchasing if they run out of credits.

o Prepaid credit cards assist the holder to observe the proper spending habits. In major cases, the holder won’t be able to spend extra money that is not in the account or purchases they cant afford to pay. This allows them to avoid a bad credit rating.

o In most small business owners, a prepaid credit card can be the best way to pay. The payment method becomes easier and simpler because the funds from the card can be easily projected.

o A prepaid credit card can be use in order to send money from the card holder to their loved ones. It can also be a good instrument to pay tuition fees for education.

o There are some of the prepaid credit cards who give extra number of credit card. For instance one credit card is for the holder the other one is for his relatives and security.

o Prepaid credit card is trouble free. By the time that the holder deposits a load or money, he or she can use it right away. Another important thing is that the holder can easily access his amount of money from the nearest ATM or POS merchants.

o The prepaid load is widely accepted and available globally. The prepaid credit card is cheaper and faster substitute to costly money transfer corporation and is supported by major credit cards globally known and accepted.

o This kind of credit card is a safe and guaranteed way for employees to receive their salary. Based upon statistical studies, prepaid credit card points out that in the United States there are over 3 million payroll that uses this method. If the salary can be deposited early for prepaid credit cards, the lesser the chance that the salary will be stolen or spent right away.

o A prepaid card is very convenient and affordable answer to those holders who suffer from banking needs. In cases like these, prepaid credit cards can be used as a bank account.

o As an addition, prepaid credit cards can also be used anywhere at anytime. In many cases, it is useful because it can simply purchase any goods and services.

o Prepaid credit cards do not require too much requisites like a bank account statement, employment certification, credit checks and security deposits.

Most of the prepaid credit card gives the holder a guaranteed acceptance processing method. It also gives several ways on how to deposit credit load without having an expensive banking set-up.

Those are the special features of prepaid credit cards. The holder should know the additional rewards for using it. For more questions and information the holder should see the nearest bank that offers this crediting method or check out the countless websites that offer these services.

Do you have bad credit, or do you want to avoid the possibility of going into debt? If so, you might want to consider getting a prepaid credit card, which is a re-loadable card that can be used anywhere a traditional credit card is used. It has its own built-in spending limit based on the amount you choose to load to it.

Prepaid cards are a great alternative if you want or need the convenience of a credit card, but don’t want to go into debt for this convenience. With one of these cards, you only use money you already have.

Just Like a Traditional Card

They look just like traditional ones. The Western Union Prepaid MasterCard, for example, has the same logo and hologram that the regular MasterCard has. The Western Union Prepaid MasterCard, like all pre-paid cards, allows the convenience of cashless purchases.

With them there are no interest charges, no late fees, no annual fees, no lengthy application processes, and no accumulation of debt. A credit check or employment check is usually not required to get one. Furthermore, these types of cards do not require a security deposit.

How Does a Prepaid Credit Card Work?

These cards work differently from traditional cards in that you set the card’s spending limit. No line of revolving credit is issued and your spending limit is determined by the amount of money you have loaded to the card. Money loaded to the card comes from funds you already have available in your bank accounts.

When you buy something with them the cost of the item you bought is deducted from the card balance. So if you put a $1,000 spending limit on your card, and the price of the item you bought was $500, your remaining balance will be $500.

No interest charges are added to the cost of the item you purchased. Using a prepaid card is like paying with cash, but with the convenience of plastic.

Money can be conveniently loaded to your card from your checking or savings account. This can be done any time of the day or night, by using a computer and sometimes by telephone or wire transfer. If you have money in your bank accounts, you can load your pre-paid credit card.

You determine the spending limit on your prepaid card. If the cost of the item you want to buy is higher than what’s available on your card, the transaction will be denied just like a traditional credit card.

Who Gets Pre-Paid Credit Cards?

People from all walks of life get pre-paid cards. These types of cards aren’t limited to a certain age group or income bracket. The majority of people who choose to get these cards usually fall into one of these categories.
Budget-conscious adults who want to control their spending. Individuals who would like to shop online but are uncomfortable giving their credit card numbers over the Internet. Prepaid credit cards can only be charged up to the value of the pre-loaded amount. If you keep this amount relatively low, you won’t loose much money if your card number is stolen. Thieves will not be able to make excessive charges to your card. People with bad history or no history. Young people who are in the process of learning budgeting skills. Parents of young people who want to teach their teenagers how to manage money and shop wisely. Post-secondary students who want the convenience of a card without further increasing their debts.
Prepaid Credit Card Restrictions

There aren’t many restrictions imposed on these cards. But you should be aware that some cards, like the All-Access Visa Prepaid Card, charge cash advance fees, application fees,
participation fees and inactive fees. The All-Access Visa Prepaid Card is also one of the few cards that allows for PayPal transfers at no cost.

Prepaid credit cards are useful tools that are often utilized to improve one’s credit. When someone is not able to make their payments on time, or has other financial trouble, their credit can be hit pretty hard. But, a prepaid credit card can help them get back in good standing with lenders. It works essentially the same as a debit card, and only allows you to spend money that you have already got. This will help you avoid many of the pitfalls that have given credit cards notoriety for being financially ruining.

To open a prepaid credit card, you will have to deposit a small fee. The fee is usually between 5 and 10 dollars. After that, you can deposit any amount of money through your bank account. This money is added to the balance of the card. After it has a balance, you can use it just like a normal credit card, to do anything that you would regularly do. Therefore you are given the convenience of a credit card without the temptation to spend more than you actually have.

Your activity on a prepaid credit card is reported to the credit bureau, so over time you can gradually regain your credit to decent standing. With poor credit, if you try to get a regular credit card, you won’t be able to find anything with decent terms. You’ll have to deal with high APR rates and inflexible deadlines. But if you can improve your credit with a prepaid credit card, you’ll be able to get a regular card with terms that you can agree to.

So if you suffer from poor credit, you should look into getting a prepaid credit card. Instead of applying for one with horrible terms and rates, you can use one that will keep you out of debt and start improving your overall credit.

A prepaid credit card is a great asset to have in your wallet. In this article, I would like to take a look at what a prepaid card is, why you should have one, and how to get one.

What is it?

A prepaid credit card works just like a regular credit card, except for the fact that the money to cover your charges must already be in your account. When you apply for and receive a card, you are given an account that is linked to the new card. You deposit money through ATM’s or direct deposits into the card account and you have that money to use anytime you need it.

Why you should have one?

These cards are a great item to have because you can do some much with it. You can use it to reserve hotels and rental cars, withdraw cash from an ATM, pay for groceries, and many more things. It is so much better than having checks on hand, because you can never spend more money than you have!

This means you can learn the correct way to save and spend your money. It teaches your financial responsibility.

Another benefit and a big one is that some of the prepaid credit cards report to the major credit bureaus which helps to restore your credit if you have had some negative marks.

How do you get one?

It’s really very easy to get a prepaid credit card. Since you are putting the money into your account, you are already approved and no credit check is necessary.