To rebuild bad credit history, you need to open a new credit account. By responsibly managing this account you can show lenders that you can be entrusted with new credit lines once again.

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 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!

One of the best cards you can get to rebuild bad credit is a secured credit card. By managing this card properly, you can have the chance to regain your credit worthiness and receive excellent credit prospects.

But what is a secured credit card? Why is it considered a bad credit credit card? How does it work? And how can you use it properly? The answers to these questions will be tackled on the next parts of this article.

What are Secured Credit Cards?

Secured credit cards are special types of credit cards. Before you can use this card to pay for your purchases and even bills, you have to come up with an initial deposit first. The initial cash-out actually serves two important functions. First, it acts as the collateral for the use of the credit card. Should the cardholder default on his secured credit card payments, the lender can tap on the initial deposit to settle the unpaid charges. Second, the initial deposit acts as the credit limit for the card. Thus, a cardholder can only spend as much as he deposited on his credit card.

How a Secured Credit Card Works

As was mentioned above, a secured credit card functions just like any other credit card. You can use it wherever credit cards are accepted to buy products and to pay for services.

Still, secured credit cards are unique. This is because they are usually offered to people with bad credit history or no credit at all. Issuers of these cards do not normally require applicants to have good credit rating. Instead, they just require applicants to submit identification documents and fill out application forms. Also, applicants need to pay application fees, processing fees and annual fees for them to get approved for this card.

Because they are usually offered to people with bad credit history, secured credit cards are also called bad credit credit cards.  Now how can you use a bad credit credit card in a proper way? Let us find out how.

Tips on Using a Secured Credit Card Properly

1.    Keep your charges minimal. Your main purpose in getting a credit card for bad credit is to build positive credit history. So avoid using it on large purchases. Instead make use of your secured credit card in making small purchases that you can pay off right away.

2.    Employ good credit habits. Remember to pay all your charges in full and on-time every month. This will not just help you avoid debt build-up. Doing this will also help you improve your credit history. By managing your credit card properly, you can be assured of regaining credit worthiness.

3.    Use your card to qualify for unsecured credit cards. People usually take secured credit cards to get approved for unsecured credit cards in the future. This is because lenders usually look at how you managed your credit card for bad credit as basis for being eligible for unsecured credit card programs. If you pay your credit charges on time for a whole year or two, lenders will see you as a qualified holder of an unsecured credit card.

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!

For people who have a bad credit history and cannot qualify for a credit card, a preloaded card is the answer.  Prepaid cards look exactly like any regular credit card except that it is easier to get a prepaid one.  In this article, let’s discuss the advantages and disadvantages of using a prepaid credit card.

Prepaid Credit Card Advantages

Easy Access. Because no credit check is done, anyone can get a reloadable prepaid card at any time.

Budget Friendly. Do you have a problem with overspending?  With pre paid credit cards, spending can be put in control more strictly since you can only use it if you have an available balance in your account.  Once your available funds have been used up, the card must be reloaded with cash before it can be used again.

Avoid Bad Debt. A prepaid card does not provide a credit line so the risk of incurring bad debt can be avoided.  There is no need to worry about paying the interest rate or late penalty fees which can cause debt build-up.

Convenience. Reloadable prepaid cards are great for people who are always on the go.  If you’re a frequent traveler, you can simply take your card with you instead of bringing a huge amount of cash.  Parents who have college kids who stay at boarding schools can send allowance though prepaid cards.

Prepaid Credit Card Disadvantages

Although there is no interest rate or late penalty fees, there are other costs associated with reloadable cards that you should watch out for.  Find a prepaid card with reasonable fees by checking out comparison websites online.  What are the costs that you should know about?

Upfront Fee. Although no credit check is required, most Issuers require the submission of an upfront payment.  Sometimes the fee is known as “application fee” or “activation fee”.

Maintenance Charge. Prepaid cards usually carry an annual fee.  However, aside from the annual fee, you may also be charged with a monthly maintenance cost or “service charge” to keep your account active.

Reloading Charges. Some Banks may impose an additional fee each time you make a deposit in your prepaid card account.  In this case, it is a good idea to find a prepaid debit card Issuer that will not charge a reloading service.

Purchase Fees. Generally, there is a purchase fee for each transaction you make.  It does not matter whether you made the purchase from a regular store or online.  You can still be charged a minimal fee  for every purchase.

Card replacement and renewal fee. In case you lose your prepaid card, there is a fee when you request for replacement.  Also, the issuance of a prepaid card is often good only for a certain time period.  When your card expires, you must pay a fee for the card renewal.

Yes, there are advantages with using pre paid credit cards.  However, before getting one, consumers must make sure that there will be no hidden costs or unreasonable charges associated with their chosen card.

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!

A credit score is used to measure a person’s credit worthiness. Whether you are planning to get new lines of credit, apply for a job, rent an apartment or office space, etc., your credit score plays an important role. That is the reason why people aim to have a good to excellent credit rating.

However, there are circumstances that may lead us to bad credit. It is not always because a person has an over-spending habit. Sometimes bad credit is a result of an unexpected events such as illness, divorce, lost of job, etc. Whatever the reason is, there is still a chance to repair a bad credit history.

Secured Credit Cards

Some people may think that getting a new credit card to recover from bad credit is a wrong move. Yet, if done the right way, it can actually be an effective step to rebuild bad credit.

Credit cards for people with bad credit? Yes, this is possible. Many credit card companies are offering bad credit credit cards or secured credit cards.

A secured credit cards are just like a traditional credit card in the sense that you can use it for making purchases or paying bills. However, you must deposit a sum of money which acts as security for your debts. If you cannot pay on time, the bank will use your cash deposit to pay off your debts. The amount you deposited will act as your credit limit as well.

How Secured Credit Cards Increase Your Credit Score

Most secured credit cards offer credit reporting to the three (3) major credit bureaus. Paying on time and avoiding exceeding your credit limit will surely improve your credit rating. Be sure to understand how you are being scored so you can work on the improvement of your personal credit history.

How to Apply for a Secured Credit Cards

The easiest way to look and apply for a credit card for bad credit is to search the internet. Most credit card companies offer online applications making the application processes faster and easier.

Disadvantages of Secured Credit Cards

Due to the high risk involved, most credit cards for bad credit come with higher fees and interest rates. There are credit card companies that charge application fees, processing fees and annual fees.

Is it worth getting a secured credit card if you have bad credit? Yes, it is. Despite having to pay higher fees and interest rates plus submitting a deposit, secured credit cards can really help you repair your credit history.

With regards to higher fees and interest rates, you just need to shop around for choices and compare your possible options before choosing the best deal. Remember to always make payments on time to avoid penalties and incurring negative remarks on your credit report.

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!

These days, almost every type of transaction requires the use of credit card- hotel and airline bookings done online are just some examples. Indeed, it can be difficult on the part of those who are not eligible to get a regular credit card because of bad credit history.

However, they can apply for a secured credit card in order to fix their credit Before submitting your application, here are some important facts you need to know about this card:

Fees:

This type of card may involve fees such as processing fees and annual fees. Such charges may also vary from one credit card company to another. You need to check the fees before applying so you can avoid credit cards with very high charges.                                                          

Deposit:

Secured credit cards require a cash deposit which can range from $300- $500. There are secured credit cards with minimum and maximum deposit limits. Some issuers may place your cash deposit in an interest-bearing account. It that’s the case, see to it that you clearly understand the terms of your credit card issuer.

Your credit limit can either be the same as or exceed to the value of your deposit. However, there are instances when your credit limit may be less than your security deposit.

You can add money to your deposit so as to raise your credit line. As an incentive for being able to pay on time, some banks may increase your credit limit after a few months of consistent payment. The cash deposit will be used by the credit card issuer in case the cardholder fails to pay off charges on time.

Qualifications:

For those who want to apply for a secured credit card, the requirements may vary from one company to another. Aside from the security deposit, some credit card companies may impose specific qualifications on age or income bracket.

Payment Reports to the Credit Bureaus:

There are times when the card company does not report your payments to the three major credit bureaus and in such case, it does not help rebuild your credit rating. If you wish to rebuild your credit history, your payments should be reported to the credit bureaus.

Unsecured credit cards have lower fees, fewer restrictions and lower interest rates. Now, if you want to upgrade your secured credit cards to an unsecured credit card, it can be possible after a year of consistent payments.

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!

People with bad credit history find it very difficult to apply for a credit card. To get approved for the best card, that you still have to wait until your credit score improves before you can get one.

Having poor credit rating raises doubts to your capacity to pay debts. Naturally, credit card companies are looking for those who can pay off their debts on time and with a great credit history to prove it.

Sponsored by:

Good thing, those who have poor credit rating may apply for prepaid credit cards. There is no background check or credit check conducted upon review of your application. The application procedure is a lot more convenient than applying for a credit card. Issuers of prepaid debit cards does not care about your credit standing. In fact, a prepaid card can be used to rebuild a bad credit. How can that be possible?

Prepaid Debit Cards and Bad Credit

Today, you can have a debit card that does payment reporting to the three major credit bureaus. Thus, as you use your prepaid card for purchases, you are also improving your credit rating.

You can go online and do research on various prepaid credit cards advertised in the market. Compare different debit cards before making a choice. Consider these important pointers:

• go for one that best suits you and your needs
• go for those that report to the major credit bureaus
• go for the one with reasonable fees

Owning a debit card can be a great way to control your spending. Set a specific budget each month and stick with the plan. Before using your debit card, check your available balance and carefully consider whether you really want to spend it for that particular purchase or save it for more important buys.

Unlike credit cards that allow you to shop now and pay later, you can only use your prepaid debit card if there are available funds in your account. This limitation prevents debit cardholders from damaging their credit or getting stuck in bad debt. Also, there is no need to think about over-the-limit charges, over draft fees, late charges, and interest rates.

Yes, you can apply for a debit card to rebuild your credit rating one step at a time. Once you have proved your credit worthiness, that’s the time you can apply for a regular credit card with good rates.

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!

A prepaid credit card is a great alternative to using cash for payment. Pre paid prepaid cards are used exactly the same way as regular credits cards. But in terms of practicality, these cards do have some advantages.
For one, a prepaid credit card helps the cardholder stay out of bad debt. Let’s discuss other advantages of using prepaid cards as well as the disadvantages that you should consider.

Sponsored by:

The pros of using a pre paid credit cards:

• Using this kind of card enables you to make purchases without cash. However, it reduces the risk of overspending because the limit depends on the amount of money deposited in the account.

• This card can be used worldwide so if you are a frequent traveler, a prepaid card is safer to carry than cash.

• There is no need to pay credit card bills.

• The procedure for the prepaid debit card application is not as complicated as when applying for a credit card.

• There are no interest fees involved.

• Prepaid cards are can be recommended for those with bad credit history. It can be used to improve a poor credit score.

• Unlike a credit card in which you can swipe now and pay later, you can only use your prepaid debit card after making a deposit in your account. Thus, it helps the cardholder exercise control over his/her spending.

The cons of using a pre paid credit cards:

• You cannot use your pre paid credit cards for payments unless you have existing funds in your account.

• The setup fee for this kind of card can be quite costly.

• There are fees involved for each transaction. Each time you use your prepaid card for payment, you are charged with an additional fee for processing the payment.

• Some prepaid card companies charge certain that can increase over time.

• Not all issuers provide credit reporting to the major credit bureaus.

Sponsored by:

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!

Credit cards with guaranteed approval can be obtained online. These credit cards are also called secured credit cards because they require the cardholder to submit cash deposit upon opening the account.

Whether you have bad credit history or no credit history, you can surely get approved for one. But before signing up and submitting your online application, here’s what you should do:

Sponsored by:

1. Don’t make decisions hastily.
Even when you need a credit card in a hurry, you should spend time comparing your choices. Remember that you are guaranteed to get an approval so you want to make sure that it’s the credit card you want.

2. Don’t submit too many credit card applications.
Too many inquiries from different issuers raise doubts about your credit worthiness. Don’t try your chances by submitting multiple applications to credit card companies at once.

3. Prepare a repayment plan.
Because it’s a secured credit card, you can expect to get approved right away. However, have you thought about how you plan to manage your account? Have made adjustments on your spending habits to avoid uncontrolled debt?

4. Consider other options.
You may also use a department store credit card or a gas station credit card to rebuild your credit rating more quickly. These credit cards can be used for purchases but you are expected to pay your full balance each month.

5. Be determined to pay off your balances completely.
The best way to rebuild bad credit is to use your secured credit card regularly. Avoid the interest rate by paying in full and making your payment on time. Before using your card for any purchase, think about your repayment plan.

6. Read the contract before signing.
Issuers of secured credit cards have different terms and conditions. Don’t assume that what you read from one company’s page will be the same as the others. Aside from the fees and interest rate calculations, you want to pay attention to the disclosures and limitations.

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!