Are Prepaid Credit Cards also Available for People with Bad Credit History?

A lot of us believe that credit lines are offered only to people with excellent credit records. After all, we get bombarded with information regarding the importance of high credit scores. We read from articles and websites that excellent credit ratings provide people extensive credit options. And these options always carry with them low interest rates, flexible payment terms, and significant sums of cash. But does the world of finance favor only those with high credit scores?

Of course not! Actually, most lenders today also cater to people with bad credit. Aside from providing great loans to those with good credit reputation, lenders are also extending credit to people with less than perfect credit ratings. And one of the credit card programs they provide to both sets of debtors is prepaid credit card.

What are pre paid credit cards for? How do these credit cards work? And why are they also available for people with bad credit? Let us answer these questions in the succeeding paragraphs.

What are Prepaid Credit Cards?

A prepaid credit card is a plastic card that functions in the same way as a debit card. This means that you have to deposit money on your prepaid credit card account before you can use your card. Once your card has been loaded with cash, you can use it to make purchases and pay some of your bills. You can charge your expenses on your prepaid credit card without incurring debts. How come?

In this credit card program, you are not actually borrowing money. As a prepaid credit cardholder, you supply yourself with the cash you need. This means that you determine how your credit card will work to your advantage. If you want to use your prepaid credit card continuously, then you just need to regularly deposit cash onto your account.

Still, there is a catch in this program. You have to pay a set up fee before you can use your prepaid credit card. The fee usually ranges from $5 to $10. You may also be charged every time you deposit money onto your account. However, these fees and charges can be simply outweighed by the benefits you can get from these cards. This is especially true for people with bad credit. Let us see why.

Benefit of Prepaid Credit Cards

We are all aware that more and more business establishments rely on credit card transactions. Thus, if you do not have a credit card, it will be difficult to book flights, reserve rooms in hotels and even rent cars.

Good thing that a prepaid credit card functions in the same way as a standard credit card! This provides people with bad credit the chance to enjoy the merchandise offered in different shops and stores. This way, everyone can gain access to quality products and commendable services.

I hope this short overview about prepaid credit cards helped you understand what these credit cards are. I also hope that this article showed you that these credit cards are not only for people with excellent scores, but also for people with bad credit.

About the Author
Tara Tiemann is a credit analyst for 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!

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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