Some people are hesitant to use prepaid credit cards, afraid that the costs of these cards will only lead them futher into debt. However, prepaid debit cards can actually be great alternatives to regular credit cards. In fact, prepaid debit cards are credit cards which can be used for establishing credit history and for repairing bad credit.

Prepaid cards can be used as payment almost anywhere regular credit cards are accepted. These special cards can also be used to shop online or to make reservations from the internet. If you are going to travel overseas and do not want to bring a large amount of cash, you can bring a prepaid debit card instead to pay for your bills and do some shopping.

Contrary to what others may think, prepaid credit cards can be tools to help you keep track of your spending. Unlike traditional credit cards, prepaid cardholders are not provided with credit lines so they do not have the option to make purchases in advance and pay back later. Since purchases are not charged to their credit, they don’t need to worry about incurring interest rate charges if they fail to pay back within the grace period.

Prepaid cardholders can only spend the money they have in their account. Once they run out of funds, they must make a new deposit or reload before they can use the prepaid card for new transactions. For people who are having a hard time keeping their credit card use in control, using a prepaid debit card can help them to limit their spending.
For instance, you can set a specific amount that you can deposit to your debit card and spend in a month. If you placed $300 in your account, you can easily plan the purchases you can charge to your debit card. Once you have spent your $300, you will not be able to charge unplanned purchases to your debit card, until you reload your account.

What’s great about prepaid debit cards today is that you can find ones that report your activities to the three major credit bureaus. This means, prepaid debit cards can now be considered as credit cards for bad credit because they can be used to improve a low credit score. For students who would like establish an early credit history, a prepaid debit card is an option.

To avoid bad debt, choose a debit card with a minimal set of fees. It is true that there are prepaid credit cards in the market that impose excessive fees so you end up paying more on maintenance costs alone. However, by doing research and comparison, you should be able to find a prepaid debit card with reasonable fees and charges.

Before using your prepaid debit card, check your balance first to make sure that you have enough funds to pay for your purchase. Take note that if you have insufficient balance, the transaction may still go through but you might be charged with an overdraft fee. Avoid paying penalties by reading the Terms and Conditions of your prepaid card.

Recommended Prepaid Offers

About the author:
Tara Tiemann is the credit specialist for Go-Prepaid. Which is a resource site for people who want to live debt free! If you are on a budget, using a prepaid debit cards and secured credit card can save you big money!

Monique Tieman

Are you planning to get a prepaid credit card?  If yes, considering the following questions should help you find the right prepaid card more easily and avoid making a poor choice:

Will your payments be reported to the major credit bureaus?

Take advantage of the fact that some prepaid credit cards today can be used as tools for building credit and rebuilding bad credit.  However, not all issuers of prepaid cards offer credit reporting service.  If you cannot qualify for a regular credit card because of bad credit or lack of credit history, make sure that your chosen prepaid debit card reports to a major credit bureau.

Does the prepaid card offer flexible payment options and online banking access?

By using your prepaid debit cards to pay bills online, your account activities can be monitored and reported to the three major credit bureaus.  Thus, prepaid cardholders can now build and rebuild credit even without using a revolving credit.  It is also a good idea to look for a prepaid debit card that enables you to access your account online at any time so you can keep track of your balance and spending.

Will you be charged with reloading fees?

A prepaid debit card is reloadable.  You can only use the card for payment as long as there is an available balance in your account.  When the balance runs out, the prepaid cardholder must “reload” or deposit new funds to be able to use the card for new transactions.

You can reload your prepaid credit card from a card reloading station at various locations.  However, there is usually a fee for each reloading service. Another way to add funds to your prepaid account is by making a direct deposit.  If your prepaid credit card account is linked to your personal savings or checking account, you will be able to transfer funds at no extra charge.

Is your prepaid card be accepted everywhere?  

Prepaid credit cards or debit cards that bear the Visa and MasterCard logos are a popular choice since they are accepted at millions of locations worldwide.  Make sure that your chosen prepaid credit card is recognized especially if you plan to use it on your travels.

How much do you need to pay each month to keep your card active?

How much will you need to pay each month to keep your account active? Monthly fees can range anywhere from $3 to $10 or higher.  If you don’t choose carefully, the monthly maintenance fees can prove to be a burden especially if you want a prepaid debit card with rewards.  Aside from the monthly fee, some prepaid cards also charge an annual fee, and inactivity fee for cardholders who do not use the card regularly.

Do you want a prepaid debit card with rewards?

Some prepaid debit cards offer various types of rewards programs.  Before opting for a prepaid reward credit card, read and understand the fine print to make sure that the fees are minimal and that the reward system fits with your spending style.

Recommended Debit Card Offers

American Express	Prepaid Visa	Prepaid Mastercard
	CREDIT BUILDER

About the Author:

Tara Tiemann is the credit specialist for Go-Prepaid.  Which is a resource site for people who want to live debt free! If you are on a budget, using a prepaid debit cards and secured credit card can save you big money!

Monique Tieman

Many credit card issuers today came up with different versions of prepaid credit cards or prepaid debit cards for consumers. Some prepaid cards are even endorsed by popular celebrities. If you’re planning to get your own prepaid card, being confronted with so many choices can prove to be a tough challenge. So which one should you pick? Consider these tips:

Know your purpose. Why do you want to get a prepaid debit card? What kinds of purchases do you plan to use it for? Are you planning to use the card on your trip? Different prepaid credit cards offer varying features and services so it’s important to know your personal needs first before starting your search for a prepaid card.

Check the fees. Some prepaid debit cards are known to carry expensive fees and these are the ones you want to avoid. What kinds of fees can you expect? Some prepaid cards require a one-time set-up fee and activation fee but you can also find others that offer free set-up and activation service.

Most prepaid credit cards charge a monthly fee to maintain the account. This fee can range anywhere from $3 to $10 or higher, depending on the type of prepaid credit card. You will also incur a per transaction charge each time you use your prepaid card for payment. Other prepaid card fees you should be aware of are overdraft fees, withdrawal fees, reloading fees, customer service fee, card replacement fee, card renewal fee, etc.

Evaluate and compare. The only way you can be sure that you’ve made the right choice is by spending some time evaluating and comparing your options. Check out a reliable credit card comparison site to see a list of prepaid credit cards in the market.

Of course, you want to look for a prepaid credit card with a minimal set of fees and reasonable terms. For instance, you can save a great deal of money if you go with a prepaid card that offers $0 activation fee, free direct deposit, and $0 or minimal monthly maintenance fee. Aside from the costs, don’t forget to consider the features of the prepaid credit card.

Ensure credit reporting. In the past, prepaid credit cards cannot be used for building or rebuilding credit because there is no way to monitor the cardholder’s account activities. Since prepaid cardholders do not revolving credit, some prepaid card issuers came up with a special program to prove a person’s credit-worthiness. How so?

By using your prepaid credit card or prepaid debit card to pay off your monthly bills such as electricity, cable, internet, and other service subscriptions, the issuer will be able to keep track of your prepaid card use and report your account activities to the major credit bureaus. Indeed, a prepaid debit cardholder now has the chance to use the card as a tool for building credit or repairing bad credit. Take note that not all issuers of prepaid cards offer credit reporting service so you need to carefully read the fine print before making a choice.

About the Author:

Tara Tiemann is the credit specialist for Go-Prepaid.  Which is a resource site for people who want to live debt free! If you are on a budget, using a prepaid credit card and secured credit card can save you big money!

Monique Tieman

Anyone can easily get a prepaid credit card at any time and this convenience is one of the reasons why prepaid cards are so popular these days.  Are you thinking about acquiring a prepaid credit or debit card too?  If so, consider these tips:

Consider a regular credit card.  If you can qualify for a standard credit card, consider this option instead of going prepaid.  Why so?  By choosing a credit card that complements your lifestyle and managing the account responsibly, regular credit cards have a lot of advantages that you can enjoy.  

Check the fees.  Although prepaid cardholders do not need to worry about high interest rate fees or late penalties, it’s important to check all the fees associated with a prepaid credit card.  The most common prepaid card fees are set-up fee, activation fee, monthly fee, reloading fee, overdraft fee, etc.  The costs vary from one prepaid debit card to the next.  Of course, you want to choose one with reasonable and minimal set of fees to save money.

Read the fine print.  Once again, the features and provisions of a prepaid debit card will depend on its issuer.  Although the application process is quick and simple, you should spend time carefully evaluating and comparing your option.

Understand the terms of use of a prepaid credit card.  What are your privileges and limits as a cardholder?  If you plan to use a prepaid credit card overseas, look for hotels and car rental companies that accept prepaid card payment.  Some merchants completely refuse debit cards as payment.  You can find merchants who recognize prepaid card payments but online reservations may not be allowed.

You should also understand the exact policies of a prospective merchant.  Take note that prepaid debit card issuers do not provide the same type of protection as credit card issuers do.  See to it that you’re dealing with a reputable and trusted merchant.

Ensure credit reporting.    Today, you can find issuers of prepaid debit cards that will report your activities to the major credit bureaus.  The only way you can use a prepaid card to establish credit or rebuild bad credit is to have your activities monitored.  For instance, by regularly using your prepaid credit card to pay bills online, you can show your capability to manage debt and repayment.

Avoid overdraft penalties.  An overdraft penalty is the fee you will incur for transactions that go through despite an insufficient fund. This usually happens when there is only a small difference between the price of the purchase and the available balance in your prepaid card.  The transaction may still go through, but you will be charged with an overdraft fee which will be deducted the next time you reload.

Control your spending.  The absence of a credit limit can minimize the risk of debt build-up. However, no one can prevent the prepaid cardholder from reloading as frequently as he/she wants.  If you sincerely want to avoid bad credit, you should exercise control over your personal spending and wisely manage your finances.

About the Author:

Tara Tiemann is the credit specialist for Go-Prepaid.  Which is a resource site for people who want to live debt free! If you are on a budget, using a prepaid credit card and prepaid debit cards can save you big money!

Monique Tieman

Prepaid credit cards or prepaid debit cards are growing in popularity in the market.  Many people who cannot qualify for a regular credit card because of bad credit or lack of credit history can easily go prepaid.  Many merchants who accept credit card payment also recognize prepaid credit cards. Like any regular credit card, prepaid cards can be used to pay bills or make purchases online and at brick-and-mortar stores.

What makes prepaid credit cards different?  The biggest difference is that prepaid cardholders do not enjoy a credit line.  As a prepaid cardholder, you cannot make advanced purchases and pay at a later time.  Bills that are charged to a prepaid card are instantly paid out using the available fund in the debit account.  What happens when the balance runs out?

In order to use the card for new transactions, the prepaid cardholder must first reload or deposit more funds to the account.  While some people may see the absence of a credit line as a restriction, others may see it as protection against the risk of debt build up.  Indeed, not having a credit line discourages unplanned purchases or unplanned spending.

There are different ways to reload or add more funds to a debit account.  Some issuers require an active savings or checking account but others do not.  If your prepaid debit card is linked to a bank account, you can directly transfer funds from your savings account to your prepaid card.  This method of reloading is usually free of charge so it’s a great way to manage a prepaid account and avoid prepaid card fees.

Another way to add funds to an account is through prepaid credit card reloading stations.  However, this option is usually more costly because you will be charged with a fee each time you reload.  Despite the fees, some people choose this reloading option and keep their prepaid debit account separate from their bank accounts for safety reasons.

Before acquiring a prepaid debit card, check all the fees associated with the card first, including the set-up fee, activation fee and reloading fees.  Of course, you want to look for a prepaid credit card with a minimal set of fees.
Watch out for prepaid credit cards that offer various types of rewards. The opportunity to earn rewards just like a regular reward credit cardholder can be tempting but the costs can prove to be a burden.  These cards may come with expensive fees such as the yearly and monthly maintenance fee.

Avoid charging purchases that exceed your available balance.  While borrowing against credit is not possible, some transactions may still go through and you may be charged with an overdraft penalty the next time you reload your account.  This usually happens when there is just a small difference between the balance and the price of the purchase.  Last but not least, choose a prepaid credit card that will report your account activities to the three major credit bureaus as this is the only way you can use the card to establish credit or rebuild bad credit.

About the Author:

Tara Tiemann is the credit specialist for Go-Prepaid.  Which is a resource site for people who want to live debt free! If you are on a budget, using a secured credit cards and Bad Credit Unsecured Cards can save you big money!

Monique Tieman

In the past years, prepaid credit or debit cards are not as popular as regular credit cards. Yet today, an increasing number of consumers are paying attention to prepaid credit cards. For instance, many people who cannot get approved for a standard credit card because of poor credit score or the lack of credit history may opt to get a prepaid card instead.

When it comes to payment, prepaid cards offer the same convenience as regular credit cards do. Prepaid debit cards are widely accepted by many merchants and establishments particular those that bear the Visa and MasterCard logos. Prepaid cards can be used to purchase online and from brick-and-mortar shops.

The biggest difference between a real credit card and a prepaid card is that the latter does not provide a credit line. In order to use a prepaid card for payment, the cardholder must first reload cash or deposit funds in the debit account. Bills charged to a prepaid card are automatically paid off using the existing cash fund. When the balance runs out, the prepaid cardholder must make a new deposit or reload the card before it can be used for new transactions.

Indeed, prepaid debit cards are considered to be a great alternative to credit cards. Since there is no need to repay charges, a prepaid cardholder does not need to worry about interest rates and late penalty fees. However, owning a prepaid debit card is not exactly without any costs. In fact, some people might be hesitant to use a prepaid debit card because some prepaid cards are known to carry very expensive fees.

Avoid Expensive Prepaid Credit Card Fees

How can you avoid fees associated with prepaid credit cards? First of all, you must begin by searching for the right prepaid card. Before acquiring one, read and understand the fine print. You can easily compare different prepaid cards online by checking out a reliable credit card comparison website. Some prepaid cards require a set-up fee or account activation fee so you need to make sure that this fee is minimal and one-time only.

Don’t forget to check the monthly maintenance fee. How much will you need to pay each month to keep your prepaid account active? Some issuers also impose a penalty fee or inactivity fee if you don’t use your card for a month. Reloading fees can also be a burden since you will be charged with an extra few dollars each time you load cash to your account.

Avoid overdraft charges. Although prepaid debit cardholders can only use their cards for payment if they have an available balance, a transaction may still successfully go through even though there is an insufficient fund in the account. This usually happens when the difference between the balance and the purchase price is relatively small. However, the prepaid cardholder will be charged with an overdraft penalty. The penalty fee will deducted the next time the cardholder reloads the card. To avoid this extra fee, check your balance first before using your prepaid card for payment.

About the Author:

Tara Tiemann is the credit specialist for Go-Prepaid.  Which is a resource site for people who want to live debt free! If you are on a budget, using a prepaid credit cards and prepaid debit cards can save you big money!

Monique Tieman

In the past, prepaid credit cards or prepaid debit cards cannot be used as tools for rebuilding credit history. This is because issuers of prepaid cards do not report account activities to the credit bureaus. In order to build credit history and credit score, account activities must be reported to the three major credit reporting agencies – Equifax, Experian, TransUnion.

A popular tool which can be used to build credit history is a credit card. Credit card companies provide their cardholders with a credit line. By using a credit card and paying charges regularly, a person can build a solid credit standing more easily. Aside from acquiring revolving credit, people can also apply for loans such as car loan and mortgage, or an equity line of credit, to build credit history.

What about using a prepaid credit card? While a prepaid credit card can be used to pay bills and make purchases just like a regular credit card, a prepaid cardholder is not provided with a credit line. However, there are issuers of prepaid debit cards today that report to the major credit bureaus. These particular prepaid cards can be used to establish credit history or rebuild bad credit.

How can a prepaid debit card help you build credit even though the cardholder is not provided with a credit line? Some prepaid credit card issuers have made a special provision to monitor the prepaid cardholder’s account activities. There are basically two ways on which you can use a prepaid debit card to build credit or rebuild bad credit: by using it to pay bills online or by purchasing from merchants that report to the major credit bureaus.

For example, you can pay your monthly utility bills such as electricity, internet, cable or satellite subscription through your prepaid debit card. Look for prepaid credit card or debit card issuers that offer online banking services or features. Thus, as you pay your monthly bills on time, you can also prove your credit-worthiness and build-up your credit score.

Keep in mind that bills or purchases charged to a prepaid debit card is automatically paid with the available fund loaded in the card. There is no need for you to make repayment at a later time. Hence, using a prepaid debit card completely eliminates the risk of debt accumulation.

A prepaid cardholder does not need to worry about paying extra charges such as interest rate and late fees. However, make sure that the fees are reasonable since some prepaid debit cards are known to impose expensive maintenance costs. Check the set-up fee, overdraft fee, reloading fee, and the monthly fee to keep your account active.

Do all prepaid debit card issuers report to the major credit bureaus? Apparently, not all issuers of prepaid cards offer this special credit reporting provision. If your account activities will not be monitored, you will not be able to use your prepaid card to establish credit or rebuild bad credit. So, before choosing a prepaid card, be sure to evaluate the terms of use and the services provided.

About the Author:

Tara Tiemann is the credit specialist for Go-Prepaid.  Which is a resource site for people who want to live debt free! If you are on a budget, using a prepaid credit cards and prepaid debit cards can save you big money!

Monique Tieman

Prepaid credit cards and store cards are popular gift ideas these past few years.  Many people prefer to give these cards as presents especially during the holidays.  If you’re planning to give one to a couple of friends and loved ones this year, which card should you choose?

Prepaid credit cards can be used much like a regular credit card.  A prepaid card is recognized by a wide range of merchants that accept credit card payments.  This is particularly true for prepaid credit cards that bear the VISA and MasterCard logos.  Prepaid cards can also be used for payment at store locations and at online stores.

On the other hand, store cards do not offer the same kind of flexibility.  A store card can only used at selected shops or from the same merchant that issued the card.  Thus, if you plan to give a store gift card, see to it that the shop or merchant you choose is a favorite of the recipient.

Some prepaid credit cards can only be used until the last cent and other prepaid cards are reloadable.  This means, you can choose whether to give a consumable or a reloadable prepaid card.  If you choose the latter, see to it that the prepaid card carries a minimal set of fees.  Some prepaid cards are notorious for having very expensive fees which can make maintenance a burden.

There are also store cards which can be re-used as long as the card is active while some store cards can only be used once.  In the same way, you should be aware of the fees involved with the store card.  How much will the bearer need to pay each year to keep it active or to prevent it from becoming deactivated.

You should also consider the recipient’s personality.  What are his/her interests?  What are his/her hobbies?  For example, if he/she loves books, then you may already know that a book as present will surely make this person happy.  However, you may not be sure as to what exact book to give.  Thus, you may give a store card from a particular bookshop instead and let the bearer of the card choose the perfect book for him/her.

A store card adds a bit more of a personal touch to gift-giving because it shows that you have an idea about the gift the person wants.  You are just giving the recipient a bit more freedom to choose a specific item closes to his/her heart.

Whether you choose to give a gift of a prepaid credit card or a store card, see to it that you purchase from a reliable card seller.  If you want to purchase online, buy the gift card directly from the merchant or from a reputable gift card re-seller.  Take note that fake prepaid cards and store cards do exist in the market and if you’re not careful, you could end up purchasing a card without any funds at all or which are unusable.

About the Author:

Tara Tiemann is the credit specialist for Go-Prepaid.  Which is a resource site for people who want to live debt free! If you are on a budget, using a secured credit cards and merchandise credit cards can save you big money!

Monique Tieman

Are you planning to apply for your first credit card in 2012?  If yes, what are your possible choices?  Which credit card is best for you and how can you use it for your benefit?  Consider these tips:

Credit Card Options for First Timers

Secured Credit Card.  Anyone can acquire a secured credit card because approval is not based on credit history or credit score.  The basic requirement to get a secured card is the cash deposit which can range anywhere from $200 to $500.  The minimum required cash deposit depends on the issuer and the desired limit.  The credit line provided will be based on the amount of the security deposit so if you need a higher limit, be prepared to submit a larger deposit as well.

Prepaid Credit Card.  Prepaid credit or debit cards can be used for payment like a regular credit card.  However, a prepaid cardholder does not have the privilege to make purchases in advance and pay later.  To use a prepaid card, you must first deposit funds in the account.  Bills paid with a prepaid credit card are instantly paid with the available balance.  When the balance runs out, the cardholder must reload or make a new deposit to use the card for new transactions.

Student Credit Card.  If you are a student, you can also apply for a credit card that’s especially designed for students. However, you will still need to have a co-signer if you are below 21 years old unless you can show proof of independent income.  Student credit cards do not require good credit since these cards can actually be used to establish credit history and build up credit score.

Pointers to Remember When Choosing Your First Credit Card

Check the rates and fees.  For secured credit cards and student credit cards, you should choose a card with a reasonable interest rate. Although you can avoid the interest rate fee by paying off your full balance each month, having a low rate card will still protect you from the risk of debt build-up just in case you may need to carry a balance.

You should also know the exact fees associated with the credit card- whether it’s a secured, student, or a prepaid credit card. Common credit card fees include annual fee, late fee, over-the-limit fee, balance transfer fee, etc.

If you’re looking for a prepaid credit card, you need not worry about interest rates but you need to watch out against prepaid cards that carry too many fees which can be a real burden.  For example, prepaid credit cards are known to impose set-up fee, monthly fee, inactivity fee, and per transaction charges- just to name a few.  How much will you need to spend in a year to keep you prepaid card active?  Some prepaid card issuers will even charge their customers who call for assistance so you need to be very careful with your choice.

Choose a card that reports to the major bureaus.  Be sure to choose a credit card that will report your payments to the three major credit bureaus.  This rule applies whether you are applying for a secured credit card, a prepaid card or a student credit card.  Use the card to build your personal credit by managing the account responsibly.

About the Author:

Tara Tiemann is the credit specialist for Go-Prepaid.  Which is a resource site for people who want to live debt free! If you are on a budget, using a secured credit card and prepaid credit card can save you big money!

Monique Tieman

If you need to use a credit card this holiday season but cannot get approved for a regular credit card, a prepaid card can be a good option.  Nevertheless, some prepaid credit cards are notorious for their high fees so you want to make sure that you will make the right choice.

With so many prepaid cards to choose from in the market, how can you pick out the right one for you?  Here are some practical tips:

Find a prepaid card that matches your purpose. How do you plan to use the card?  What kinds of purchases do you want to use it for?  Do you need a prepaid card that you can bring with you on an international trip?  Prepaid credit card features vary so you should be clear about your purpose and then look for a card that complements your particular needs.

Read and understand the fine print.  Although it is very easy to get a prepaid credit card, you should still spend some time reading the fine print.  What are the terms of use and what are the exact fees you need to be aware of?  What are your privileges and limitations as a prepaid cardholder?

Compare the costs and choose one that is more affordable.  As mentioned in the beginning of this article, some prepaid credit cards are known to carry outrageous fees.  Prepaid cards that are endorsed by celebrities or bear their names and photos are usually the most expensive cards too.  You need to look beyond the design of the prepaid card and compare the specific fees.

Common prepaid credit card fees include the set-up fee, monthly fee, per transaction charge, inactivity fee, overdraft fee, and more.  You might even be charged each time you call up the customer service hotline to ask for assistance.  Needless to say, you should compare and choose the prepaid card with a minimal set of fees.

Choose a prepaid card that offers reasonable security.  Prepaid cardholders do not enjoy the same protection as real credit cardholders do.  For instance, you may not be entitled to the same kind of protection against liability or unauthorized charges.   However, the ideal prepaid card should offer liability protection or free card replacement for lost or stolen cards.  This means, you will be issued with a new prepaid card with the same amount of load in case the card is lost or stolen.

Avoid extra fees by complying with the rules.  You need to be familiar with the terms of your prepaid card.  For instance, most prepaid cards impose an overdraft penalty.  This is the fee you will incur if the amount of your purchase is higher than your available balance.  IF there is only a small difference between the total purchase and the available balance, the transaction may still successfully go through.  However, you will incur the overdraft fee and this will be deducted to your balance the next time you reload the card.

About the Author:

Tara Tiemann is the credit specialist for http://www.go-prepaid.com.  Which is a resource site for people who want to live debt free! If you are on a budget, using a prepaid credit card and bad credit credit card can save you big money!

Monique Tieman