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Card Credit Prepaid - The Benefits of a Prepaid Credit Card

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Prepaid credit cards serve a very useful purpose for individuals who cannot afford a credit card or have been smart enough to steer clear of them altogether. Credit cards serve no practical purpose for many people, but the growth of internet activity has created a significant need for this financial utility. Prepaid credit cards are very useful for any number of online transactions, such as paying bills. They also provide a convenient and efficient way to access your money without carrying cash.

With the economy in its current state, many individuals are reluctant to use credit cards as they have in the past. Many of our personal economic woes stem from credit card use and abuse, often leaving the cardholder responsible for a mountain of delinquent and impulsive charges. Sometimes a credit card is just too easy to use. The minimum payment option that many individuals utilize creates a significant interest rate increase and can lead to a higher balance.

With the recent changes in rules and regulations in the banking industry, many credit card companies moved ahead of the curve to increase interest rates before the new “fine print” regulations were effective. The landscape of the credit card industry has clearly changed. Credit card companies can no longer hide the possibility of exponential debt growth from the consumer. The prepaid credit card option is essentially the personal version of the “pay-go” principle.

Prepaid credit cards may very well be the most efficient method of full utilization of services offered on the internet. Prepaid card users tend to post nominal amounts of money, as opposed to a maximum credit line for a traditional credit card. This could be devastating if someone were to steal your personal credit card or banking information. Prepaid credit card accounts can be monitored daily and damages are limited to the amount of money on the card in the event of identity theft. Many people have a prepaid credit card account specifically for this type of financial protection. The cardholder also reserves the right to contest a suspicious charge to the card, similar to credit card purchases.

Another point to consider with using prepaid credit cards is the legal right to the money. Though posting the money puts it in the hands of the credit card company, it is a promise to pay just like a standard bank. In many ways the card functions just like a bank account, minus the check writing feature. Paperless transactions are becoming more the norm than the exception as the internet becomes more shopper-friendly.

The prepaid card puts the cardholder in control and balances are not restricted. The posting amounts are often only done in specific increments, but most card programs have no maximum card balance. Funds may be withdrawn at most ATM machines.

Prepaid credit cards are offered by all of the major credit card companies. They carry the official logo, just like a traditional credit card. Used in the same manner as credit cards, purchases will require a pin number or a personal signature. When prepaid cards are used on the internet the security code number on the back is required by some vendors, but not all.

All prepaid credit cards will require a registration fee for the card and it normally does not expire for two years, sometimes less. The average card registration fee is around $10, regardless of the company. Monthly fees are also assessed at between $5-10 per month. Monthly fees could be higher, depending on the premium account plan. Always check acceptability for any prepaid credit card. All major credit card companies are not compatible. The primary prepaid credit card companies are the most efficient in terms of universal acceptance.

When choosing a prepaid credit card company keep these tips in mind, as most of the card plans will be very similar. The real advantage of the prepaid credit card is the ability to safely control your financial liability and still have immediate access to your money.

Card Credit Service - How Do Credit Card Services Work? [next] [back] Card Credit Interest Rate - Interest Rates & Credit Card Terms: What the New Credit Card Act Means

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