Prepaid Credit Cards

Prepaid credit cards offer help if you don't qualify for regular, unsecured credit cards because you have a bad or no credit history. If you have bad or no credit history you'll have a hard time getting or renewing your credit cards. This is where prepaid credit becomes useful.

In credit economy credit cards are almost indispensable in almost any business transaction. For example, you can't purchase anything online without a credit card. For this reason, if your applications have been rejected by unsecured credit card issuers, a prepaid Visa or MasterCard can help you. Pre-pay credit card can help you make purchases as well as manage your monthly budget and get your spending under control.

What is Prepaid Credit Card and How Does it Work?

A prepaid credit card is a card that requires you to open an account and deposit your money into the account. After your credit card company establishes your account they will issue a card that you can use to charge items up to the amount you have deposited into the account. You can deposit money into the account either through check payments, online transfers from your checking account, or directly from your payroll.

This reload-able card is safer than carrying cash. It also  offers convenient as it can be used everywhere Visa or MasterCard is accepted. In addition, there are no interest charge, no late fees, and no accumulation of debt on a prepaid card.

There are credit card companies that offer prepaid MasterCards and/or prepaid Visa. Both these cards can be used like regular credit cards. In fact, these cards look and work like a credit card -- it's hard to distinguish which card is prepaid or not, by simply looking at it or even using it.

Prepaid Credit Card Advantages

• Obtaining a prepaid card is easy. You can apply online or in local retail stores with no credit check or proof of income. All you need to do is fill out an application, pay a small fee for setting-up the account and load the card with cash.

• No interest charges and annual fees. Unlike the regular credit card, when a prepaid MasterCard or prepaid Visa is used, there is no interest charge and annual fees.
• Pre-paid credit cards are free from financial or credit problems.
• Prepaid cards can be used almost anywhere. Unlike debit cards that are often times not accepted for hotel or rental car reservation, prepaid MasterCards and Visa cards are almost accepted anywhere in the world.

Prepaid Credit Card Disadvantages

• You have to pay a set-up fee of 5 to 50 dollars for opening an account. Then you pay another fee of $5 or more every time you load money onto the card. Regular unsecured credit cards usually don't charge a set-up fee or a loaded fee.
• You can't purchase things and services with credit. There are no credit purchase since you have to have cash up-front before you make any purchase with your card.
• Some pre paid cards can't be used to pay regular payments such as monthly electric consumption or online services.

So, pre paid cards are a definite help if you have bad or no credit history. Pre pay credit cards can be a good option to secured credit cards as ways to establish or reestablish the credit you deserve. There are a few credit card companies that offer guaranteed approval with no employment verifications or credit checks. Your only concern is choosing one prepaid credit card that suits your needs and offers the lowest total costs.