Is a Prepaid Credit Card What You Need?


It is true that obtaining a prepaid credit card is a lot easier than applying for a regular credit card. The question is, what kind of credit card do you really need? On this post, let’s take a look at a few factors that you should consider before getting a prepaid credit card.

Purpose. What’s your purpose for wanting to get a prepaid card? Will it be your first credit card? Do you plan to use it for establishing credit history? Or do you currently have bad credit? Would you like to use you a prepaid card to rebuild your credit score?

If you want to establish credit history or build bad credit, you may also consider a secured credit card. A secured account is much similar to a regular credit card account, except that a secured card requires the submission of cash deposit.

Take note that not all issuers of prepaid credit or debit cards report to the major credit bureaus. If you want a credit card to help you in building or rebuilding credit, you should make sure that your payments and account activities will be regularly reported to a major credit bureau.

Cost. Another important issue is the cost. While you don’t need to worry about incurring interest rate charges, some prepaid credit cards are known to carry a lot of fees which can prove to be steep. For example, you will be required to pay a set-up fee when you acquire a prepaid card.

Most issuers impose a fee per transaction which means an additional cost will be added to your bill each time you use your prepaid debit card for payment. Other fees common to prepaid debit cards are monthly fees, overdraft fee, inactivity fee, etc.

Before choosing a prepaid debit card, make sure that you understand all the fees associated with the use of the card. By comparing your options, you can surely find a prepaid credit card with a minimal set of fees that will match your needs.

Terms and Conditions. Obtaining a prepaid credit card is quick and convenient. However, you still want to spend some time reading the fine print. This way, you can be sure that you will not be subjected to hidden fees.

Who is the issuer of the prepaid credit card? If you search for prepaid credit cards, you will come across a long list of debit cards from different issuers. It’s important to understand that not all prepaid credit cards offered in the market is issued by a legitimate company. It is best to get a prepaid card from a reputable and trusted issuer.

Some prepaid credit cards offer rewards too. While this can an attractive deal, prepaid cards with reward programs may also come with expensive fees. If you need to pay a high price just to keep your prepaid account active, you might be better off with a real reward credit card.

You should also choose a prepaid credit card that is widely accepted, not only in the US, but internationally as well. Prepaid cards that bear the Visa or MasterCard logo are ideal especially if you plan to use the credit card overseas.

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 secured credit card can save you big money!


About Liz Roberts

Liz Roberts is the new credit specialist for Go-Prepaid. If you are on a budget, we can get you discounted cell phone service from Sprint, Verizon and T-Mobile! NO CREDIT CHECK ! Using a prepaid services can save you a TON of money! Follow our blog to find out how!

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