Prepaid Credit Cards – Same Card With Fewer Hassles
Do you have bad credit, or do you want to avoid the possibility of going into debt? If so, you might want to consider getting a prepaid credit card, which is a re-loadable card that can be used anywhere a traditional credit card is used. It has its own built-in spending limit based on the amount you choose to load to it.
Prepaid cards are a great alternative if you want or need the convenience of a credit card, but don’t want to go into debt for this convenience. With one of these cards, you only use money you already have.
Just Like a Traditional Card
They look just like traditional ones. The Western Union Prepaid MasterCard, for example, has the same logo and hologram that the regular MasterCard has. The Western Union Prepaid MasterCard, like all pre-paid cards, allows the convenience of cashless purchases.
With them there are no interest charges, no late fees, no annual fees, no lengthy application processes, and no accumulation of debt. A credit check or employment check is usually not required to get one. Furthermore, these types of cards do not require a security deposit.
How Does a Prepaid Credit Card Work?
These cards work differently from traditional cards in that you set the card’s spending limit. No line of revolving credit is issued and your spending limit is determined by the amount of money you have loaded to the card. Money loaded to the card comes from funds you already have available in your bank accounts.
When you buy something with them the cost of the item you bought is deducted from the card balance. So if you put a $1,000 spending limit on your card, and the price of the item you bought was $500, your remaining balance will be $500.
No interest charges are added to the cost of the item you purchased. Using a prepaid card is like paying with cash, but with the convenience of plastic.
Money can be conveniently loaded to your card from your checking or savings account. This can be done any time of the day or night, by using a computer and sometimes by telephone or wire transfer. If you have money in your bank accounts, you can load your pre-paid credit card.
You determine the spending limit on your prepaid card. If the cost of the item you want to buy is higher than what’s available on your card, the transaction will be denied just like a traditional credit card.
Who Gets Pre-Paid Credit Cards?
People from all walks of life get pre-paid cards. These types of cards aren’t limited to a certain age group or income bracket. The majority of people who choose to get these cards usually fall into one of these categories.
Budget-conscious adults who want to control their spending. Individuals who would like to shop online but are uncomfortable giving their credit card numbers over the Internet. Prepaid credit cards can only be charged up to the value of the pre-loaded amount. If you keep this amount relatively low, you won’t loose much money if your card number is stolen. Thieves will not be able to make excessive charges to your card. People with bad history or no history. Young people who are in the process of learning budgeting skills. Parents of young people who want to teach their teenagers how to manage money and shop wisely. Post-secondary students who want the convenience of a card without further increasing their debts.
Prepaid Credit Card Restrictions
There aren’t many restrictions imposed on these cards. But you should be aware that some cards, like the All-Access Visa Prepaid Card, charge cash advance fees, application fees,
participation fees and inactive fees. The All-Access Visa Prepaid Card is also one of the few cards that allows for PayPal transfers at no cost.
Tags: Bank Accounts, Late Fees, Prepaid Credit Cards, Security Deposit, Western Union Prepaid Mastercard