Prepaid Credit Cards Won’t Bring You Debts

By Stephen Fisherton on January 7, 2011

Prepaid cards are good replacements to credit cards especially when you don’t want to get stuck in a great deal of debts. Credit cards are commonly used for renting cards, reserving rooms in a hotel and even booking for a flight. But basically, charging through credit cards will add up to your debts and it even accumulates interest charges, therefore adding more debts. Here’s where prepaid cards can prove to be more beneficial than credit cards.

Prepaid credit cards are branded with Visa, MasterCard and American Express. They can be loaded with money and may include benefits such as gifts and discounts. The good thing about these cards is that they can be accepted in stores who also accept credit cards.

How do these cards work? Simple. Card holders like you will have to deposit money in the card. Present the card when paying for the purchases and that’s it. You won’t be receiving monthly statements reminding you to pay your dues and you won’t be worrying about interest charges eating up your wallet.

The amount of your purchases will be debited to your card, thus reducing the balance of your deposit. Once you used up all your balance, just reload the card with enough money and you can purchase again.

Managing prepaid credit cards is easy. All you need is to come up with enough money to pay for your purchases or expenses. No more worries about finance charges and no more late fees. It provides a stress-free utilization, opposite to a credit card, which has to be paid regularly to avoid the burden of more debts.

The only downside in using prepaid credit cards is that you have to pay a lot fees. There’s an activation fee, transaction fee paid monthly, a dollar fee for PIN purchases and fees for checking the balance left in the card, and even withdrawal fees. These fees are automatically deducted from our balance, giving you less money to spend. Another is that card issuers do not report your application and your timely payments to the credit bureau, a negative point for you if you want to build a credit history.

If you are a person who is fond of shopping online but does not want to use credit. A prepaid credit card is best for you. You won’t have debts and interest charges to worry about plus you can control your expenses by limiting the deposit you made in the card.

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