Applying For A Prepaid Credit Card
If you do any kind of online shopping (and who doesn't these days), then you surely know the importance of having a credit card.
It is very hard to purchase anything online if you don't have a credit card. People with poor credit or no credit at all can find themselves shut out of internet commerce altogether if they aren't able to obtain a credit card.
With the economic downturn, credit card companies are much more careful about who they give credit cards to. The days of anyone obtaining a card, no matter what their current financial situation is, are over.
So what is a person with no credit history to do?
What's a person with a poor credit history to do?
The answer - prepaid credit cards.
A prepaid credit card is the perfect solution for:
1) young people who might not have a credit history and can't obtain a credit card
2) someone without a job or any meaningful employment history
3) someone with poor credit who is no longer able to obtain a credit card
4) someone who is a compulsive online shopper
Prepaid credit cards aren't really credit cards at all - they are debit cards.
Meaning, you load the card with money, and the amount of money on the card represents your total spending limit.
So if you load a prepaid credit card with say, $100, then you are only able to spend up to a maximum of $100. If you want to spend any more, then you would need to reload the card.
Everyone can obtain a prepaid credit card. There is no credit check necessary, as you aren't actually applying for credit. There is also no minimum age requirement.
This is an ideal situation for a parent who doesn't want their child using their credit card online.
This is an ideal situation for someone who might have a problem when it comes to controlling their online purchases.
This is an ideal situation for someone who has extremely poor credit, is unable to obtain a credit card and needs to have access to a credit card.
Prepaid credit cards are perfectly acceptable substitutes for "real" credit cards when it comes to making online purchases.
You can use a prepaid credit card at Amazon.com and on Itunes.
You can use a prepaid credit card at the local gas station or convenience store.
You can also check your balances online to find out if you will need to reload your card soon.
How do the fees work on most pre-paid credit cards?
First off - since you are funding the card upfront, there are no interest fees. You aren't borrowing money, so there is no need to pay interest.
Most companies will charge a fee of around $10-$15 to initially set up and fund the card.
After the card is operational, you will need to pay a fee (usually) if you use the card to withdraw cash. Online purchases and purchases with merchants are usually free.
There are also fees to cancel cards and have replacement cards issued.
Over the next few days, I will be adding a comprehensive list of some of the best pre-paid credit card offers that you should consider applying for (if you are in the market for a prepaid credit card).
Filed under: General Knowledge