credit card problems


Prepaid Credit Card

When you use a standard credit card, you pay for the convenience of being able to purchase things without saving the money up first. The issuing bank is essentially lending money to you, and you repay it on a regular basis. But with a prepaid credit card, there is no line of credit or loan. Instead, the user will make deposits to a bank account, and then use the card to withdraw that money for purchases. Why would you use a prepaid credit card if you don't actually get any credit?...continued below

Prepaid credit cards have been growing in popularity over the past several years. But despite the 'credit card' name, no credit is actually involved. Here’s how they work.

A prepaid credit card is a good choice if you want to be able to make purchases online without taking the risk of giving unknown merchants your credit card information and access to your credit line. Many people today are sensitive to online credit fraud, and this is one way around it.  Be aware though, that many merchants that require monthly payments will not accept a prepaid card for purchases.

A prepaid credit card is also an excellent way to provide a weekly or monthly spending allowance to a child at college. The student has the convenience of being able to charge things on the card, and you can easily control the amount that's spent by the amount of the deposits you make to the account.  This will go a long way in teaching them how to manage their money.

If you've decided that a prepaid credit card is the right choice for you, there are quite a few options available that can offer you varying benefits. Perhaps you're looking to repair or restore your credit. Maybe you want a way to give your away-from-home student a monthly allowance. No matter what your reason, why not choose a prepaid credit card that allows you to earn income at the same time?

Prepaid Credit Cards That Help You Rebuild Your Credit

Not every financial institution that issues stored value credit cards makes reports to credit agencies about your spending history. If part of your reason for applying for a prepaid card is to repair your credit history, make sure you choose a company that does. There are also a number of issuing companies that offer credit reporting as an add-on service for an additional fee.

Prepaid Credit Cards That Pay You Back

Some major financial institutions will offer you a prepaid credit card with an opportunity to make income. They offer a rebate on spending, or a referral program. If you don't need to build your credit, and believe that your income through spending rebates and referrals will exceed the annual membership fees, then these types of cards might be a good choice for you.

What ever your reason for selecting a prepaid credit card, just make sure that you shop around to get the best deal, and that you check out the company to make certain that they are a reputable one.