Some individuals are unwilling to use prepaid credit cards, afraid that the costs for these cards will only lead them to bad debt. However, prepaid debit cards can, in fact, do great choices to regular credit cards.

In fact, prepaid debit cards are bad credit credit cards which may be used for establishing a credit rating and for repairing poor credit.

Prepaid credit cards can be used as payment anyplace where regular credit cards are accepted.

These special cards can also be used to shop online or make reservations from the internet. If you are going to travel overseas and do not like to bring a substantial amount of cash, it is possible to bring a prepaid debit card instead to pay for your bills and do a few shopping.

Contrary to what others may think, prepaid credit cards can be tools to help you keep track of your spending.

Unlike traditional credit cards, prepaid cardholders are not provided with credit lines so they do not have the option to make purchases in advance and payback later.  Since purchases are not charged to their credit, they don’t need to worry about incurring interest rate charges if they fail to payback within the grace period.

Prepaid cardholders can only spend the money they have in their account.

Once they run out of funds, they must make a new deposit or reload before they can use the prepaid card for new transactions. For people who are having a hard time keeping their credit card use in control, using a prepaid debit card can help them to limit their spending.

For instance, you can set a specific amount that you can deposit to your debit card and spend in a month.  If you placed $300 in your account, you can easily plan the purchases you can charge to your debit card.  Once you have spent your $300, you will not be able to charge unplanned purchases to your debit card, until you reload your account.

What’s great about prepaid debit cards today is that you can find ones that report your activities to the three major credit bureaus.

This means, prepaid debit cards can now be considered as credit cards for bad credit because they can be used to improve a low credit score.  For students who would like establish an early credit history, a prepaid debit card is an option.

To avoid bad debt, choose a debit card with a minimal set of fees.

It is true that there are prepaid credit cards in the market that impose excessive fees so you end up paying more on maintenance costs alone.  However, by doing research and comparison, you should be able to find a prepaid debit card with reasonable fees and charges.

Before using your prepaid debit card, check your balance first to make sure that you have enough funds to pay for your purchase.

Take note that if you have insufficient balance, the transaction may still go through but you might be charged with an overdraft fee. Avoid paying penalties by reading the Terms and Conditions of your prepaid card.