What are prepaid credit cards?
This type of credit card does not require you to submit to a credit check, and in fact, you can buy and use some
prepaid credit cards anonymously without revealing any of your contact information to the company that issues the credit card.
Many people are turning to this alternative credit card in lieu of other cards for a variety of reasons.
Convenience
This type of credit card is convenient. You can use your prepaid card wherever regular credit cards with the Visa or MasterCard
logo is accepted.
Works like Regular Credit Card
A prepaid card works just like a regular credit card. You just shop, checkout, and scan your credit card like any other
transaction with a standard credit card.
Works like Regular Credit Card
A prepaid card works just like a regular credit card. You just shop, checkout, and scan your credit card like any
other transaction with a standard credit card.
Available to Everyone, Regardless of Credit Score
Prepaid credit cards can be obtained by everyone, regardless of credit. Even if you have a low credit score, it doesn’t matter.
Anyone can walk into a store and purchase a prepaid credit card and then load however much money they need onto the card instantly.
Controls Spending
Prepaid credit cards allow you to be in control of your spending. Once you have spent the amount of money that is loaded onto your
card, you cannot use the card again until you put more money on it. Traditional credit cards allow you to spend more
money than you can afford to pay back, in many instances.
No-Interest Credit Card
The prepaid credit card is cheaper to carry than regular credit cards, since you won’t be charged interest on your purchases.
Standard credit cards allow you to run a balance. When this happens, you are charged interest, which is how the credit card
companies make their money.
Protection from Unauthorized Transactions
If your prepaid card is lost or stolen, the amount on the card is limited, so you limit your losses. With a traditional card, until you
realize the card is missing and report it, you can be held responsible for any charges incurred by the thief, which can run into
thousands of dollars if you have a high credit limit. Most cards feature protection from unauthorized transactions if the card is
lost or stolen.
Safe to Use Online
Prepaid credit cards are safer to use online. Many people are not comfortable giving their credit card numbers over the Internet.
If your information is compromised, however, when using a prepaid card, the amount that is lost to cyber theft is minimal.
You can simply replace your card with another card by buying a new card at your local retailer. With a traditional card, if
your information is compromised, your identity can be compromised, too. This can lead to a number of complicated scenarios.
And again, you are protected from unauthorized transactions.
Ideal for Teens
Prepaid credit cards are perfect for teenagers, since the parent can load the amount of money that they want the teen to
have access to onto the card. When that money is gone, it’s gone.
Safer Gift than Cash
The prepaid card is a great gift that allows you to give the recipient a gift that is safer to use than cash.
Online Expense Tracking
Most prepaid credit cards allow you to establish an online account, if you wish, so that you can view your transactions, just
like a regular credit card.
As you can see, there are a number of reasons that getting a prepaid credit card account can be beneficial to you or your loved one.
Updated: January, 8 2012