Thursday, January 31, 2008

What Is A Prepaid Credit Card?

Prepaid credit card is a credit card that is primarily used for people who have bad credit and for them to recover from it. It can be quite a useful tool, especially for someone like me who has bad credit due to overspending on too many credit cards. In fact, this qualifies me absolutely for a prepaid credit card simply because my credit score is low and bad. And because this will not be a factor in the decision to award me the card, due to the card companies not checking on such details at all.

However, before you get all happy about getting a credit card in the form of a prepaid credit card, do not count your chickens before they hatch. You will need to have some money first to use such a facility, because that is what the name prepaid means. You need to have some cash to deposit to use as credit so that in a way it can help to control your spending using the card, but with the convenience of having it to be used at many outlets, stores and retail shops that accept credit cards.

But before you sink yourself deeper in by jumping on a prepaid credit card, make sure you double check the fees required to use it. You will often be charged a variety of types of fees, so shop around and compare which ones are the best and offer you the best value. While you want the convenience and flexibility of using a prepaid credit card, you do not want to end up spending more on fees than actual usage of the credit line, which is in the first place, your own money. If you cannot get accepted by normal credit cards, prepaid credit cards are your next best bet, but that does not mean you sink yourself further in debt just to have the facility.

So now that you know what a prepaid credit card is, which is just another credit card but with a credit line that is actually funded by your own cash, go and shop around for the one that offers the best benefits and lowest fees. Only then will you be able to benefit fully from a prepaid credit card without getting yourself further into trouble with your credit rating, debt and family at the end of the day. A prepaid credit card is useful, but make sure you check online for the best deals for your own benefit.

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