Why Buy A Prepaid Credit Card?

What are prepaid credit cards? Why would you buy and use a prepaid credit card? How are they better than secured and unsecured credit cards? What are the rates and fees for using prepaid cards? Find out all this and more in this hub about prepaid cards.

First of all let's start with what they are. They are just like prepaid phone cards that you load up with minutes and then reload them when you run out.

The concept is the same with prepaid cards. You load them with money and then you can use them just like you would a regular credit card. Just without the high interest rates and over the limit or late fees.

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Once you run out of money on your prepaid credit card, you are done spending money on that card until you deposit more money.

They are convenient to do all your online shopping. You don't have to worry about hackers or identity thieves getting access to your bank account through your debit card. They can only take what amount you have on your card.

You can maintain your privacy. Let's say you have a joint credit card bill with your spouse and you wanted to surprise them with a nice gift for their upcoming birthday but you don't want them to see the charge on your joint statement.

You could buy a prepaid Visa or MasterCard and use that to buy their gift.

Another benefit is to keep you out of debt. If you only have $1,000 loaded on your card, you can only spend $1,000 and you will not owe anyone any interest. The money is yours and once you run out it's gone.

You can use one to keep track of your teen's spending. You can give them one and load it up with their allowance and drop them off at the mall. This will teach them responsibility and not to spend friviously.

As you can see there are many benefits to using prepaid credit cards.

Now how much do they cost?

Like with regular credit cards, some deals are better than others. Some will charge you nothing to activate your new card while others will charge you $19.95 to activate a card. Some even have an annual fee of up to $50. Avoid cards that have an annual fee.

You may also have to pay a monthly fee of between $0 and $5. You may also have to pay a small fee for each time you use it.

Of course you have to pay a fee to use an ATM. How else would banks make their money?

As you can see there can be a lot of fees associated with using these prepaid cards. They have to make money somehow if they are not charging you interest.

To me they are not the great deal the companies advertising them make them out to be. If you have no other option because you have been denied credit or you have bad credit then try and find one with the lowest fees.

So should you buy a prepaid credit card? That all depends on your situation. Hopefully, after reading this hub you will be able to make a smarter decision.

Click Here For The Best Prepaid Credit Cards