Shopping for a Prepaid Credit Card

Prepaid Visa or MasterCard credit cards are pre-funded cards that work just like standard issued credit cards.  A prepaid credit card account is opened by depositing money into the card account and is often able to be reloaded with new funds once the initial funds are depleted or run low. 

Some of the greatest benefits of the prepaid credit card is that prepaid credit or debit cards do not require a credit report or credit history, any employee verification or previous bank records.  Often the credit card approval is instant once proper identification is process by the credit card issuer.  The credit card approval can be secured quickly entirely online.

Once you have money in your account, the card applicant is issued a prepaid credit card that can be used anywhere one would use a regular credit card.  The cards can be used anywhere Visa or MasterCard are accepted and at many ATMs worldwide.

The best part of the prepaid credit card is that you can use the card as little or as much as you want and you won’t be in debt.  The money is yours and once it’s gone, you can’t spend any more until you make another deposit.

Before choosing a prepaid credit card or debit card you may want to consider the following tips.

First, you have to know what kind of credit card rates and fees you are going to get involved with by signing up for a particular card.  There can be prices as high as $150 attached to simply the application fee to sign up for the new credit card, without even mentioning the charge that is likely to accompany your statement on a month to month basis.  Other factors certainly influence the decision on which prepaid card to select, but this can play a big role, especially when you take into account the wide potential variance of these kinds of fees from credit card company to company.

Second, you’ll want to know where your new card will be accepted.  Not all prepaid credit cards have universal acceptability.  If you have limitations on where your card will be accepted, make sure you decide if that is where you are likely to use it the most, or if it is going to hamper you by not being taken by more vendors.  A quick check to see that the prepaid credit card has either the Visa or MasterCard logo will assure wide card acceptance.

How much money can you put on the card at once may be an important feature to investigate.  Most of these types of cards do have a limit as to how much can be loaded on the card.  They usually go up to $2,500, but be sure to check it.

You’ll want to know the method for getting a balance on the card or the process for getting the card funded.  Some of the prepaid credit cards are not the most user friendly and require you to mail money in or stop at one of their stores to place money into your account there.  The simpler option is to find a prepaid credit card with a quick load method online or going through whomever you do your banking with.  Keep an eye out for a high fee for putting money on the card as well.  A lot of these cards will have an amount they charge for doing just that, but try and find the lowest load fee you can.

You should also check into what kind, if any, reward program your prospective prepaid credit card offers.  Some of them offer points systems, just like regular credit cards do to redeem for various goods or services.  Don’t forget that basic rule of shopping though, if it sounds to good to be true, it probably is.  If a card is offering you service that accompany holding it like any permanent discounts or services, make sure you read the fine print to see if they are charging you extra monthly fees for these premium benefits. 

Find out what kind of statement issuing service the card has.  In the age of technology not everyone is mailing regular statements anymore, and often just offer up electronic versions instead.  If you’re not computer savvy and need a paper statement, some cards may actually charge you a fee to receive those statements in the mail.  There is a chance as well that you will have to notify them each month of your desire to receive a physical statement.

Finally, be sure to investigate the liability protection on your prepaid credit card in case it is lost or stolen.  The regular terms that apply to normal credit cards don’t always play in the prepaid world.  Sometimes they can have a clause that you must notify them within a certain amount of time or you lose any protection from unauthorized charges.  You will want to read the terms and conditions carefully for any clauses that talk about liability and stolen cards.

A prepaid credit or debit card can be a good choice for managing your finances at low cost.  Be sure and approach these credit card applications like any other credit card application or financial service and be cautious while selecting the best credit card to match your needs.  Review all of the terms carefully of course, but for this point, check out what kind of fees you will pay to sign up as well as how much they will charge for ongoing use of the card.

Tags: credit card approval, credit card company, credit card rates, credit cards, new credit card, prepaid credit card offers, prepaid credit cards

This entry was posted on Thursday, October 22nd, 2009 at 4:15 pm and is filed under Credit Card Articles. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.