Are you familiar with pre paid credit cards?  Perhaps you may notice the ads that promise instant approval for anyone- even for people with no credit history or with bad credit.  True enough, anyone can easily get a prepaid credit card regardless of his/her credit rating.  But is this type of credit card for you?

Who Should Get A Pre paid Credit Card?

While pre paid credit cards offer instant approval, it’s important to understand that these are not the same as a regular credit card.  First, prepaid cards do not provide its holders with a borrowing limit.  Second, these credit cards require the submission of a cash deposit in the cardholder’s account. Third, the cardholder can only use a prepaid credit card if there is an available balance in the account.

However, despite the limitations, those who have a problem with their credit history can use pre paid credit cards to rebuild a poor credit rating.  Through regular use of this card, the cardholder can slowly but surely build up credit history without the risk of bad debt.

Who should apply for a prepaid credit card?  If you cannot qualify for a regular credit card and you want to establish or build credit, then a prepaid card is a good option.  For parents who need to send money to their kids in college, providing them with their own prepaid credit cards is the most convenient and safest way to send and receive cash.   Travelers can also use prepaid credit cards as a safer way to pay for all their travel expenses..

How to Get A Pre paid Credit Card?

Pre paid credit cards can be acquired by visiting your nearest bank or by submitting your application online.  To get approved, the applicant must first open a deposit account and submit the minimum required payment.  The amount can range anywhere from $200 to $500 and above, depending on the prepaid card issuer.  Keep in mind that the amount of your security deposit will also determine your spending limit.

Since charges are automatically paid using the funds in the cardholder’s account, there is no need to worry about additional interest rate fees.  Nevertheless, there are other costs that can be expected such as the set-up fee, maintenance fee, transaction charges, and possible penalty fees.

Can you use a pre paid credit card for establishing credit or repairing bad credit?  The answer is yes as long as your chosen issuer offers credit reporting service to the three major consumer reporting agencies.  Before making choice, check out the complete terms and conditions of the prepaid 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!

Major problems in life affect the credit records of people. A recent job loss, divorce, accident and illness can inflict damaging effects on people’s credit history. This is because during these unavoidable situations, people usually resort to borrowing funds. And sometimes, they find it difficult to pay back whatever amounts were owed. This inability to pay off creditors is the main reason why people receive bad credit records.

Do you also worry about bad credit? But do you want to re-establish your credit history? Well, worry no more, because this article will discuss what you can do to rebuild credit. This can be done by applying for secured credit cards.

What Secured Credit Cards Are

Secured credit cards, also known as credit cards for no credit, is a credit program offered to individuals who are yet to establish their credit history and to those who may have histories of bad credit.

This credit card program usually requires applicants to provide collateral, in a form of an initial deposit. This initial cash deposit actually serves two important functions. First it serves as the credit limit for secured credit card. This means that you can only charge your purchases and bills on the card only up to the value you have deposited onto the credit card account. If you were required to deposit $200, this will be the maximum amount of credit you can charge to you card. You cannot go over this limit. If you do so, your credit transaction will be declined, and you may be charged with declined transaction fees.

The second purpose of the collateral is for security. Should you default on your payments; the credit card company can tap into your initial deposit to pay for your unsettled charges.

Credit cards for no credit or bad credit usually have the following requirements: a checking or savings account, and a filled out application form. Lenders may also ask applicants for secured credit cards to provide proof of their employment as well as identification papers.

A negative aspect of credit cards for no credit is that some may have high interest rates and fees. Aside from paying processing fees, cardholders must pay significant amounts for interest. Still, it is important to note that such fees and rates may just be temporary. As long as you prove yourself worthy of credit, you can expect a reduction of these rates and charges.

Secured Credit Cards – Beneficial for Bad Credit?

How can you benefit from getting a secured credit card? Well, this card can allow you to succeed in your battle with bad credit. You can re-establish your credit reputation as long as you consistently pay your debt installments on time.

In so doing, you can increase your credit score and this will in turn expand your credit prospects. As long as you maintain good payment habits you can expect to qualify for low interest credit and excellent loan opportunities in the future

Secured credit cards are also excellent tools to help people manage their finances. Through these cards, you can control your spending habits. After all, you can only make purchases as long as there is available cash on your credit card. This will surely help people free themselves from uncontrolled debts and the credit worries associated with them.

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!

Prepaid cell phone services are becoming more popular these.  People who do not want to commit to a long term contract and those who cannot qualify for a post paid phone service because of bad credit turn to prepaid plans.

Are you planning to get a prepaid phone too?  Or are presently subscribed to a post paid plan yet considering a switch to prepaid?  Before you take the next step, first consider if a prepaid cell phone service is indeed right for you.  In this article, let’s discuss the advantages and limitations of using a prepaid wireless phone.

Prepaid Phone Advantages

Lower your monthly bills. You can save a great deal from a prepaid wireless phone if you choose the plan that matches your needs.  Pay-as-you go plans are recommended for people who do not need unlimited talk time.   Many prepaid cell phone companies offer affordable bundle packages that comes with the two basic services- text messaging and calls.      

No credit check done. Anyone can get a prepaid phone at any time regardless of credit standing.  It doesn’t matter if you have bad credit or no credit history at all.  Since you will only be able to use your phone by reloading credit, Issuers do not need to worry about defaults.

More affordable. If you stick with the budget you set, then prepaid phones are definitely the best way to cut costs.  You can get a prepaid plan for as low as $10 per month only.  That gives you at least 30 minutes of talk time at .10 cents per minute per call and .10 cents per text message.

Prepaid Phone Limits

Higher Per Minute Call charges. You can expect higher per minute call charges compared to a post paid plan.  Thus, if you to make calls from a wireless phone on a daily basis or if you need one for business, perhaps a contractual phone package is the more practical choice.

No Free Handset. Post paid wireless plans are often accompanied with the latest phone units or handsets that you can get for free or for cheap monthly installments.  On the other hand, prepaid providers do not offer free handsets since the use is not subject to any contract.  Thus, if you want a trendy handset, you’ll have to buy it on your own.

Extra Services cost more. If you want to subscribe to additional features such as voice mail, caller ID, three-way conferencing, call waiting etc., you need to pay extra for each type of service.  With a post paid plan, these functions are often already included with the package.

Limited Coverage. Different prepaid phone providers extend varying coverage services, depending on the area or State.  It’s very important to consider this factor especially if you frequently go on out-of-State trips.

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!

If you want to apply for  secured credit cards, consider these top ten Frequently Asked questions along with the answers:

1. What is a secured credit card?
It is a type of credit card that is created for people with bad credit or no credit history.  To make up for the risk, the applicant is required to submit a deposit.  The amount of deposit will also define the secured cardholder’s credit line.

2. How do I apply for a secured credit card?
Some banks and credit card issuers offer a secured credit card.  You can personally apply from your local bank or send an application online.  If you are a member of a credit union, you may inquire if your Union offers a secured credit card to enjoy lower interest rate and fees compared to commercial Issuers.

3. What fees should you be aware of?
Some secured credit cards charge an application fee while others may not.  Although all secured credit cards carry annual fees, you should be able to find a card with a reasonable annual fee by doing your research.  Carefully examine the fine print to make sure that there are no hidden charges.

4. How much is the security deposit?
The security deposit may runs from $300 to $500, depending on the Issuer. If you need a higher credit limit, be prepared to raise your cash deposit as well.

5. Can a secured credit card help me get out of bad credit?
Yes.  A secured credit card can be used for rebuilding bad credit but this will depend on the kind of card you choose and how you will use it.  To rebuild credit, you must use your secured regularly.  However, it is important to pay back your charges on time at all times.  More importantly, you need to make sure that your payments will be promptly reported to all three major credit bureaus as it is the only way you can raise your credit score.

6. Will others know that I’m using a credit card for bad credit?
No.  Your card will not show any sign or print indicating that you are using a secured account because you have bad credit history.  That information is exclusively between you and your secured card Issuer only.

7. Will my deposit earn interest?
Some Issuers place the security deposit in a timed deposit account to earn interest.  Before choosing a secured card, understand how long your money has to stay in the deposit account should you want to terminate your secured card.  Furthermore, understand if you can keep the interest your money earned or if it will go to your card’s Issuer.

8. Can I get an upgrade to unsecured credit card?
Some issuers will automatically upgrade your account to an unsecured credit card after a year of consistent payments.  You can also request for an upgrade if you think you have proven your credibility as a cardholder.

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!

Plastic money or credit cards became very popular over the years. However, not everyone can qualify a credit card that easily, especially those with no credit history or with bad credit. Fortunately, there is another option and that is to get a prepaid credit card.

Prepaid Credit or Debit Cards for Everyone

Issuers of prepaid debit cards give everyone the chance to use plastic money without going through a complicated approval process. Unlike standard credit cards that require good credit history, credit check is not necessary to get a debit card. All that is required is an advanced deposit which will be used for payment.

Just like a regular credit card – you can use it when buying groceries, shopping at malls, paying utility bills, or purchasing from online stores. As long as you have available funds in your account, you can use it to pay for your charges.

Prepaid Debit Card Limits

What makes a prepaid card different from a real credit card? First, we must understand that a debit account does not come with a credit line. Each time a debit card is used for payment, charges are instantly paid off using the deposit in the cardholder’s account.

For instance, if you have made a $300 deposit, you can only use your debit card for charges up to $300. If you want to continue using it for more, you must make a new deposit in your account.

Prepaid Debit Card Advantages

Generally, prepaid debit cards are accepted anywhere credit cards are accepted. Most merchants allow both credit and debit card payments. This is especially true if your prepaid card bears the Visa or MasterCard logo.

Prepaid debit cards are great for people who are often on the road or on trips abroad. Instead of bringing a large amount of cash, they can use a debit card for most of their travel expenses. Students can also benefit from prepaid debit cards since it prevents them from incurring bad debt. For parents, they can conveniently send cash to their kids through their prepaid accounts. Even employers who hire home based employees or freelancers can use a prepaid debit card to send wages or service fees.

Although some people may frown at the thought of not being extended a credit line, those who want to control their spending will find this limitation as a blessing. And because you are not allowed to go over your limit or to pay at a later time, extra fees such as interest rate, overdraft fees, late penalty fees, and other credit card surcharges are completely eliminated.

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 have been part of many people’s lives. You can use it to purchase items, pay bills, (i.e. phone bills, utility bills, etc.) make airline or hotel reservations or even to rent a car. In addition to this, credit cards are great for people who want to establish credit history.

However, people with low or bad credit scores find it difficult to qualify for a traditional credit card. The next best option for them is to apply for secured credit cards.

FAQs about Secured Credit Cards

What is a Secured Credit Card? A secured credit card is like a traditional credit card except for one thing – a person applying for this type of credit card is required to deposit a certain amount of cash that will serve as guarantee for debts. The deposit will also determine the cardholder’s credit line.

If the cardholder can show an impressive performance for at least 6 consecutive months, the secured card issuer may raise his/her credit line without requiring for additional deposit.

Where can I get one? Check out websites of different credit card companies offering secured credit cards. Most issuers offer free online application. You can also compare the rate of interest and fees online. Another way is to consult your bank.

How much money do I have to deposit? This will actually depend on the credit card issuer. Some issuers require a minimum of $300 while others may require at least $500 for deposit.

What are the other charges or fees I have to pay? You will need to pay an annual fee to keep your account open. Secured credit cards often come with higher fees and interest rates. It is highly recommended to do your own research, shop for possible options and compare.

What are the things I should consider when choosing a Secured Credit Card? First, you have to check the interest rate and fees. Look-out for hidden charges. Second, read and understand the fine print before signing up.

Third, you should always make sure that the credit line you choose fits your budget or income. The last thing you should check is if the credit card issuer you chose reports to all three (3) major credit bureaus. If you are trying to improve your credit score, it is important to make sure that every single payment you make, is well-accounted for.

Are there problems I should be aware of? Using a secured credit card has its advantages and disadvantages.

• Advantages:

1.Anyone can apply even people with bad credit.

2.Great way to rebuild a bad credit history.

• Disadvantages:

Since most people who apply for secured credit cards are individuals with bad credit:

You may be required to pay an upfront fee what they call receiving “guaranteed” credit cards.

The interest rates and penalties are higher than unsecured credit cards.

How long will it take before I can qualify for an unsecured credit card? The average time is about a year. This will, again, depend on the issuer.

How To Use Your Secured Credit Cards to Your Advantage

It is a must to always use your credit card wisely. This type of freedom is sometimes abused. Some credit cardholders purchase items that are not really needed. Although a secured credit card prevents you for spending more than your credit line, maximizing your credit limit is discouraged.

Be sure to pay your monthly bills on time to prevent penalty fees. Since you are aiming to rebuild your credit history, you need to alert about your payment habits.

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!

Secured credit cards are wonderful tools for people with bad credit and no credit history. These special credit cards can help a person build-up and rebuild credit. In this article, let’s discuss facts about secured cards and everything you need to know about them.

What is a Secured Credit Card?

A person who wants to open a secured credit card account must first make a deposit in his/her savings account. This will serve as a guarantee in case the cardholder fails to pay charges on time. The security deposit required varies, depending on the issuer.

The cash deposit will also determine the value of the cardholder’s credit limit. Some issuers will match the exact value of the deposit while other issuers may offer a slightly lower or higher limit than the amount of deposit made.

Take note that secured cards are different from prepaid debit cards. Thus, if you fail to pay off your monthly balance in full, you will incur the additional interest rate charge.

Why Apply for Secured Credit Cards?

A secured card is recommended for people who yet to establish credit history. Application and approval is easy as long as you can submit the required security deposit. On the other hand, if your credit rating has been damaged, you will need a secured credit card to rebuild it.

What about those who have just filed for bankruptcy? If you have a record of bankruptcy, you may have to wait until it has been discharged before you can apply for a secured credit card. Nevertheless, as soon as you are discharged, a secured credit card is the perfect tool to re-establish your damaged credit history.

Aside from quick approval, one great advantage of using a secured credit card is that it can help keep your spending in check. Because exceeding your credit limit is not option, the cardholder can become more conscious about his/her expenses.

Of course, secured credit cards can be used for payment or purchase anywhere regular credit cards are accepted. No one even has to know that you are using a secured account. That fact is only be between you and your credit card company.

Shopping for the Right Secured Credit Cards

The ideal secured credit card should have minimal fees. Most secured cards do carry annual fees so pick out one with an acceptable annual fee charge. Avoid credit cards that require miscellaneous or hidden charges.

Secured cards are also expected to have slightly higher interest than unsecured cards. By doing comparisons, you should be able to find one with a reasonable APR.

Spend time reading the fine print. You should clearly understand the Terms and Conditions of your chosen issuer before signing up. In addition, make sure that your payments will be reported to the major credit bureaus as it is the only way you can build/rebuild your credit history.

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!

If you plan to rent a car on your next trip, you must have your credit card ready. But what if you do not have a credit card? Or what if you do not want to use a credit card to rent a car? Is it possible to use your prepaid debit cards for payment?

Here are some tips on how you can use a prepaid debit card to rent a car without hassle:

Explore your options. Different auto rental companies have varying policies in accepting renters. Do your research online and get to know which companies allow prepaid debit card payment. It is also a good idea to call up different branches of the same company as the rules may vary from one branch to another.

Be prepared to wait in line. Paying with a credit card is the quickest way to make a transaction. If you’re going to use a prepaid debit card, expect that the process will take much, much longer. You may have to wait in line at the car rental counter as your credit history, proof of auto insurance, and other Identifications are verified.

Load up your debit account. Aside from the cost of the car rent, you must have available funds in your debit account. This is known as the “hold” or “block” – funds which are linked to your checking or savings account.

Visa or MasterCard. Merchants and auto rental services only accept debit cards that are supported by major processors such as Visa or MasterCard. If your debit card does not bear the Visa or MasterCard logo, major rental companies may refuse to do business with you.

Check your credit rating. Your personal credit rating will be questioned as well. If you have a history of bankruptcy or if you have a low credit score, you may find it difficult to rent a car using prepaid debit cards.

Prepare necessary documents. You will be asked to submit supporting documents such as utility bill, proof of auto insurance, return airline ticket, itinerary, driver’s license, and valid IDs. The names and signatures on the documents you submitted should match with the name and signature on your prepaid debit 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!

Secured credit cards are credit cards for those with bad credit and those who never had credit. It is important to understand what a secured credit card is and what other things you have to know before signing up for one.

• Understand the terms and conditions of the credit card company. Before signing up, you have to read the fine prints first in order to avoid unpleasant surprises later on.  You need to verify some important information: the length of grace period, the rate of interest, credit limit, charges, and the other details of the offer.

• Check your lifestyle and need for credit. If you are getting secured credit card to fix your credit rating. You must choose a card that matches your lifestyle.  If you do not need to use your credit card on large purchases, choose one with a lower credit limit.   

• Compare different types of cards in order to find the best card for you. There are lots of companies offering secured credit cards, and every company has their own set of rules. You have to carefully compare credit cards to find the one that suits you best.

• Period to wait to qualify for an unsecured card. Secured credit card holders can qualify for an unsecured credit card after a year of consistent payment.

• Verify if they’re reporting to the main credit bureaus. This is very important if you are attempting to reestablish your credit history.

You have to make sure that your chosen secured credit card company reports your payments to the major credit bureaus to have your credit report updated.

• Research for more information. Every 6 months, the Federal Reserve publishes a survey of credit card terms. There are various websites over the internet where you can compare offers.

These are just some of the important points that you have to think about before applying for a secured credit card. All secured credit cards may not be the same, and so, it is important to compare them to make sure that you’re signing up for the right one. This can also serve as your stepping stone to get approved for 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!

It doesn’t really matter if you already own a credit card or not. Having a debit card in your wallet can come in handy at any time. What benefits can you expect from a prepaid debit card? Here are 8 benefits to think about:

1. You can set your own spending limit. With a credit card, it can be a little difficult to control spending because you have the option to purchase in advance and pay at a later date. With a debit card, that’s just not possible. If you want to limit your spending, deposit only the amount you plan to spend for the entire month. This way, you can be more in control of your budget.

2. Safer for travels and shopping around. Why carry a large amount of cash in your wallet when you can bring a prepaid debit card instead? Just like credit cards, debit cards offer protection against lost. In case your card gets stolen, you can call your issuer to have your account blocked against unauthorized transactions. Your debit card will be replaced with a brand new card number.

3. Avoid bad debt. Debit transactions are automatically paid the moment the purchase was made. If you don’t have an existing balance in your debit account, you will not be able to make any purchase. Thus, it eliminates the risk of bad debt.

4. No credit check. You don’t need to have a perfect credit history to get a prepaid debit card. Just like department store cards and gas station cards, credit check is not a requirement. Even with no credit or poor credit, you can easily get one.

5. No monthly bills. No bills will come your way, no payment due dates, no late penalty charges, and no interest rates. Imagine how stressful it must be to be worrying about all these.

6. Withdraw cash from any ATM at any time. Prepaid debit cards are also great during times of emergencies when you need to cash. For parents who need to send money to their college kids on a regular basis, a debit card is the faster, safer, more convenient and cheaper way to do that.

Sponsored by:
7. Can be used locally and internationally. If you travel to different countries, choose a prepaid debit card with a Visa or MasterCard logo. This way, you can be sure that your card will be accepted at leading merchants worldwide.

8. Build credit history. The newest prepaid debit cards in the market today offer credit reporting to the major credit bureaus (Experian, Equifax, TransUnion). Those who want to establish credit or rebuild bad credit can get a debit card without worrying about getting rejected.

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!