Many people do not want to get a prepaid debit card until they need one. When stuck in bad credit, you will not be able to get approved for credit cards that require a good credit score. In this case, applying for a debit card gives you a guaranteed approval.
Prepaid Debit Cards for Rebuilding Bad Credit
It is good to know that prepaid debit card issuers today now provide credit reporting to the major bureaus. This means people who need to rebuild their credit history can now use a debit card to do so. However, prepaid debit cards are not just for people with bad credit. Below are other benefits of using prepaid debit cards.
Avoid interest rate charges. When you use your debit card for payment, your bills will automatically be deducted from your cash deposit. Since a debit card payment is as good as cash payment, you will not be charged with any interest rate.
Avoid late penalty fees. Submit your credit card payment even just a day after your due date and you will incur late penalty charges. With a debit card, you can completely forget about late fees.
Limit your spending. Credit card holders often fall in the debt trap because of maximizing their credit limit or falling behind on their payments. Because of its limitation, using a prepaid debit card can help you exercise more control over your spending.
Send or Receive money conveniently and cost-effectively. Do you need to send money to your kids? DO you have employees that you need to send payment to regularly? If yes, then using a prepaid debit card is an easier and more cost-effective way to transfer money.
Sending money through Wire Money Transfer services mean paying for a service charge per transaction. With a debit card, transferring money is free as long as your recipient uses a debit card from the same issuer. Furthermore, your recipient can withdraw the money only a few seconds or minutes after the transfer was done.
About the Author
Tara Tiemann is a credit analyst for Go-prepaid.com which has been a resource site for people who want to live debt free. If you are on a budget using prepaid debit cards,prepaid credit cards and prepaid cell phone service can save you big money!