Benefits of Using a Prepaid Credit or Debit Card

A prepaid credit card works just like any other credit card - with one major difference - the money you will be spending when you use it has been previously deposited into a secure account. Like a gift card, when the deposited money is gone, you can no longer use the card. But unlike a gift card, you are not limited to purchases at a particular merchant but can use it at any store that accepts major credit cards.

With no or a bad credit history, it may be difficult to qualify for a standard credit card. But when a card is needed, an easier solution may be to apply for a prepaid credit card. There is no worry about your credit history or more debt, because you are not borrowing any money but actually using your own money. You will be depositing funds into a secure account and using the card like a gift card until the funds are depleted or additional funds are deposited.

Other advantages include an easier way to track spending and with the ability to limit the amount of funds, many parents provide them for their college students and teens. The account activity can be monitored online to help keep within a budget. The balance can be checked or loaded with additional funds online or over the phone.

A prepaid Visa or MasterCard is a safe, secure way to carry your money. When traveling, using one allows you to leave your checkbook at home. It also offers convenience when a merchant only accepts cash or credit. You also have the security of knowing that you must sign for every purchase, making it difficult for a thief to use your card. In addition, if your card is ever lost or stolen, you can cancel it with a simple phone call.

Make sure you read all the fine print in order to find the offer with the best terms when you’re shopping for a prepaid credit card to meet your needs. When you compare offers, find one that has a PIN number that will make it possible to use the card anywhere you would normally write a check. Be sure to understand all of the fees and any minimum balance requirements.