Prepaid Credit Cards - Off Risk Free Convenience

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Many companies today are offering prepaid credit cards to those with credit problems to help them get back in the financial game. This allows those with problems to have the advantages having a traditional credit card offers. Branded gift cards are offered through many banks and work much like a prepaid card with various limitations and fees. When you apply for such a card you are going to have to pay fees but they are comparable to the fees paid when applying for a card with low credit scores.

Branded Credit Cards

A branded card has the advantage of being accepted but the same places as a traditional credit card. Visa and MasterCard, both well known names, are often the company backing the branded cards offered by banks. These cards are used like a debit card. If a merchant doesn’t accept them then you won’t be able to use it. Even some bank issued gift cards are not acceptable everywhere.

Know What You Are Getting

A prepaid card doesn’t have many of these problems. There is no interest on your purchase and they are accepted wherever credit cards are accepted. But keep in mind, there can be fees for certain transactions and they can be costly. So know what you are getting into before you purchase one. Once you sign up there is usually a fee associated with cancelling the card as well. Another hidden fee can be the monthly charges many companies charge you.

Count the Cost

Knowing the fees can help you choose your transactions wisely. If you have an All Access Prepaid Visa, for example, you can open an account with only a balance of $9.95. Sounds good as most transactions that you do online cost nothing. But if you go to an ATM machine to pull money there is a $2.00 fee. If you inquire about your balance its $.50 to do so. There is also a monthly fee of $9.95. If you let your account go inactive they charge you $5.95 and if you lose your cared it’s $5.95 to replace it. The fees can add up.

On the flip side of that you can get a branded prepaid card, backed by MasterCard, through another company. There is no application fee and they only ask for a $5.00 balance to open the account. ATM withdrawals are pricey, they cost $4.95 and there is a $3.95 charge every time you add money to your card from your bank account. The nice thing about this card is you can arrange to have your paycheck put directly on it via direct deposit. There are other charges as well.

Is it Worth to Get one?

It may be worth it to you to get a prepaid credit card. Just make sure you totally understand all the fees and charges before applying. There are many good reasons to go for this type of card if you know what you are getting into beforehand.

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