Credit Card Rewards

Prepaid credit cards have been around for over ten years now, although they are just now coming into the spotlight. Prepaid credit cards are basically credit cards backed by major credit card companies that offer you the ability to deposit money onto the card and then use it for purchases. You are not allowed to spend anything more than you have deposited in most cases. It is a great way to teach students good financial responsibility. There are a lot of advantages to prepaid credit cards, and only a few disadvantages. However, before committing to any prepaid credit cards, you should be clear on the companys rules and fees.

No Credit Checks

One great thing about prepaid credit cards is that there is usually no credit check required. This makes prepaid credit cards ideal for those with lousy credit scores or even those without any previous credit to build their credit. If you have bad credit, this is a nice way to slowly rebuild your credit score. Creditors will see the card on your report and see if you use it responsibly and often.

No APR

Many prepaid credit cards offer no APR on money deposited and your purchases. Some do charge high interest rates on your balances however, so beware. There is no reason you should pay a monthly interest rate on money you have deposited or on purchases. Therefore, you should certainly look for cards that offer no APR.

Fees

Just like the bank, some prepaid credit cards charge fees on your transactions. Some prepaid credit cards will charge you ATM fees or cash withdrawal fees. These are the most common fees with prepaid credit cards. Some cards however may try to charge you a monthly usage fee. Try to get a prepaid credit card that does not charge this monthly fee. They exist out there, so just search. You will save yourself a lot in the long run by avoiding a monthly fee on your prepaid credit cards.

Direct Deposit

Prepaid credit cards often have the ability to allow you to directly deposit your check onto your card. This eliminates the need to go to the bank each week. This is the perfect option for the cardholder that uses their prepaid credit card for everything. Take advantage of these convenient options, as they can save you time. The truth is, prepaid credit cards are responsible ways to spend money. They give you the option of using your money anywhere credit cards are taken without leaving you with a high monthly bill.
Prepaid credit cards can also offer reward programs and other incentives similar to regular cards. They are convenient and low risk. As with any credit card, make sure your prepaid credit cards have terms which with you agree. It is better to read everything before rather than later.

The invention of the Pre-Paid credit card has several advantages and disadvantages. The advantage of having this type of card is that you can have an instant credit card without worrying about the usual credit check. This is good for someone with bad credit who can not get approved for an unsecured credit card. Unlike a secured credit card, the person doesnt have to have a bank account or deposit money.

Pre-Paid credit cards can be purchased at most private owned shipping and mailbox businesses, retail drug stores such as Walgreens, CVS, Rite Aid and many other businesses. This type of card can also be purchased online.

This is also recommended for the person who can not open a bank account due to credit issues. Many jobs require that a person receive direct deposit. Now, if a person can not approve for a bank account how can they receive their pay? Companies like GreenDot offer a solution by offering direct deposit for those who need it. This is perfect because there are no additional cashing fees that a person would normally be charged if they cashed their check at a check cashing store. The monthly fee is less than $5 per month. A person can order pizza, airline tickets or anything where credit cards are accepted.

Another advantage is that this helps a person to establish or re-establish their credit. Some Pre-Paid credit card firms offer services where the consumer can have their monthly account activity reported to major credit bureaus. All the person has to do is maintain a certain balance in their account.

The only draw back with a Pre-Paid credit cards that if you are in an emergency situation and you need to rent a car. Not all car rentals allow you to rent a car with a Pre-Paid Credit Card.

Another draw back is that with a regular credit card, most companies offer many benefits such as frequent flyer mileage. With a Pre-Paid card, there is none of the extras such as frequent flyer mileage or road side assistance. Many companies offer credit card holders benefits if their card is stolen. For example, some companies will immediately give their customers extra funds if money has been stolen out of their account in less than 24 hours. With a Pre-Paid credit card, that is not the case. Before investing in a Pre-Paid credit card, make sure that you read the companies terms and conditions, this will save you a lot of confusion in the long run.