A prepaid credit card is perfect for individuals than have little or no credit history. It is also a great alternative to a bank account.
Prepaid credit cards work like this; you make a deposit on your card/account. Then you use your card to make purchases. The funds are then withdrawn from your account.
The most popular methods of depositing funds are direct deposit, money gram or western union. If you choose to use direct deposit it will save you money because you will no longer have to pay check cashing fees. Most cards will allow you to use direct deposit for free.
There is also a feature most cards offer called bill pay. This feature allows you to use your account to write physical checks. You can pay bills such as rent, cable, and electric or write a check to an individual. This can save you money by not having to pay for expensive money orders.
You can also use you card at ATM’s to access cash. You will never have to pay interest or overdraft fees with a prepaid credit card.
Some cards also offer a feature called credit builder. This service keeps track of the payments you make using bill pay. It then reports those payments to a credit reporting agency. This can help you build positive credit and prove credit worthiness to future lenders. This feature is free with most cards.
These cards will be issued as a visa or mastercard. This means your card will be accepted everywhere the visa or mastercard logo is displayed. You can also use your card online and over the phone. You card will not say prepaid on it so no one will ever no the difference between your card and an unsecured credit card or bank card.
Prepaid cards do not have a credit check or chexsystems verification. This means everyone is approved regardless of their credit history.
In sum, it is much safer to carry this card than walking around with cash. You card works just like a checking account and is accepted everywhere credit cards are. You are also guaranteed to be approved.
Author: Dan MoskelThis author has published 1 articles so far.