Credit Card Rewards

A pre-paid credit card is just what it says, a credit card paid for in advance. Once the credit limit is reached, the credit card is just a piece of plastic. You have to again pay upfront to renew it. The credit limit is thus known, fixed and limited.

Advantages Of Pre-Paid Credit Cards

Pre-paid credit cards are sure guarantee against empty bank accounts and credit-induced poverty. Your pride remains intact as pre-paid credit cards look just like the usual credit cards. No one will know that your spending is restricted. They are boon to shopaholics and impulsive buyers who end up with a mountain of debt before you can say Jack Robinson. They are an excellent buy for parents whose teenagers want to be treated as adults. Teenagers can also independently use their pocket money, summer job earnings and cash gifts to buy one. Some, like the Visa Gift Card, make an ideal birthday or wedding present. After all, buying presents can be nerve-wracking if you do not know what the prospective recipient wants or will appreciate, and sometimes because you do know! Others like Visa’s Travel Money Card are like travelers cheques without the attendants hassles. Most such cards may also come with benefits like protection from card theft, identity theft or fraudulent purchase.

Some companies find it a good substitute for paychecks. Employees get pre-paid credit cards limited to their salaries and linked to a single bank account of the company. The employee does not need a separate salary account. Additionally, he can step out of the office and into a shop, restaurant or a mall. No frustration of standing in queues to encash that salary check.

Some Problematic Areas

One of the disadvantages of pre-paid credit cards is that they charge a fee. It is also possible that the places where you shop, eat or buy may not accept pre-paid credit cards.

However, overall the benefits outnumber the drawbacks. All those in need of fiscal discipline for themselves should go for pre-paid credit cards.

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.