Best Prepaid Credit Card
The Best Prepaid Credit Cards Are Perfect No-Credit Credit Cards
The best prepaid credit card offers a good alternative to a traditional credit card if you have a poor credit history or a bad credit score. This type of card came about in the 1990s when credit card companies were forced to find new ways to secure lending in the face of mounting losses.
The "secured credit card" was launched and soon after came the prepaid debit card. American Express, MasterCard, VISA, and most of the other major credit card companies now issue pre-paid credit cards.
How Does The Best Prepaid Credit Card Work?The best prepaid credit card works similar to the prepaid phone cards and the
prepaid gift credit cards
that are available at department stores. You first apply an amount of money to the card. This can be done at convenient retail locations or at an online banking site. The amount of money you apply sets the credit limit on the card.
To make a purchase, you simply present the prepaid card to the merchant and the money is accessed. The money on the card is reduced whenever the card is used until the balance reaches zero. When its balance reaches zero, the card can no longer be used until it is reloaded with additional funds.
Advantages To ConsiderThere are several advantages to having the best prepaid credit card. For one thing, it's are safer and more convenient than carrying large amounts of cash. And it can be used throughout the world in most countries, depending on which credit card company you obtained the card from. The top credit card companies like American Express, MasterCard, and VISA all offer this type of card, as do most of the larger banks.
Because you apply the money to the card, you get to set the limit, so you always know exactly how much you can and should be spending. Since there's no bill to pay each month and no accumulating balance to worry about, you cannot fall into debt through the misuse of this card.
The best prepaid credit card can be reloaded very easily, either by phone or online, provided there are adequate funds available in your bank account. This makes electronic funds very accessible for anyone traveling on business or while on holiday.
Many small business owners and even some large companies are now using prepaid cards as a safe and convenient alternative to a new business credit card or company expense accounts.
And if you're searching for credit cards for teens or students, the best prepaid credit cards offer the perfect solution. They can be used by anyone over the age of eighteen, and no credit history is required. Parents can easily reload the card from their bank account and monitor their child's spending. This makes pre-paid credit cards for students relatively safe and practical.
Even people with a bad credit rating or no credit rating can use them since the funds need to be applied to the card upfront before it can be issued and used. Thus, no credit checks or employment checks are required. They are the perfect "no credit credit card."
Disadvantages To ConsiderThe biggest disadvantage to using even the best prepaid credit card is its cost. As with most specialized credit cards, the user fees can be relatively high. For example, there are fees for setting up the card and additional fees for reloading it with funds. With some prepaid cards, you must maintain a minimum balance on the card and there are cancellation fees should you ever decide to cash it out.
Obviously, it makes sense to choose the prepaid cards with the lowest fees. It will pay you to shop around and see which company will offer you the best deals. The average fee charged to reload a prepaid card is around $5.00, so always apply enough funds to the card to avoid repeat reloading and needless expense.
If you are seeking to improve your credit history or repair your credit score, there is something else you should consider:
Since prepaid cards can be obtained without a credit check, they are seldom reported to credit agencies, so they do nothing to improve one's credit rating. If building a good credit history is important to you, getting the best "secured credit card" might be a better option.
How To Access Your FundsTo access funds from your pre-paid credit card you use your personal identification number or PIN number. However, don't take any chances. Change your PIN number often and keep it a secret. Don't even share it with your closest friends and family members.
It's also a good idea to ask the bank or card company to place a "daily maximum" on your card. This will at least offer you some protection if you ever lose your card or it gets stolen, or if someone discovers your PIN number.
Compare The Advantages, Then DecideThe best prepaid credit card has more advantages than disadvantages. This is especially true for those unable to obtain traditional, secured credit cards because of their poor credit history.
However, like any other card, it must still be used responsibly. Don't lose it and be careful not to reload it repeatedly until your bank account is drained. By budgeting your expenses and carefully recording your purchases, you can avoid most financial difficulties.
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