Rebuild Bad Credit With A Prepaid Credit Card

Can you really use a prepaid credit card to repair bad credit? Some people may think that prepaid credit or debit cards are nothing but plastic cards for spending. Today, many issuers have enhanced prepaid debit cards so they can now be used for rebuilding credit. In this article, let’s talk about how you can use a prepaid debit card to repair your personal credit.

Credit Reporting Provision

In order to improve a low credit score, regular payments must be reported to the three major credit bureaus (TransUnion, Equifax, Experian).  In the past, only credit cards provide credit reporting but now you can find issuers of prepaid debit cards that include this important service. Thus, when comparing prepaid cards, make sure that your payments will be reported.

Limit Personal Spending

A prepaid debit cardholder is not provided with a credit line. This limitation can actually be advantageous especially for people who are having difficulty keeping their spending in control. With a debit card, you can only charge purchases while there is available balance in your account. When the balance runs out, you must make a new deposit in order to use your card for new transactions.

Get Approved Quickly

People with a history of bad credit may find it difficult to get approved for a regular credit card. A secured credit card can be an option but it often requires a cash deposit. Meanwhile, a prepaid debit card does not require a maintaining balance as long as the annual fee is paid to keep the account active.

Avoid Extra Fees

Because each debit card charge is immediately paid using the available funds in the cardholder’s account, there is no need to pay interest rate. However, a debit cardholder must also be aware of the other fees.

For instance, if you charge a purchase greater than your available balance, you may incur an overdraft fee. Also, take note that there might be a fee for every transaction you make, depending on your chosen prepaid debit card issuer.

About the AuthorTara 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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