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Credit Cards And Loan Resources For People With Bad Credit

Blogpost

tips to increase your credit score

What You Should Know About Prepaid Credit Cards

on May 24, 2018by Shelly Evansin Prepaid Credit Cards

It is very common for people to have prepaid credit cards today. Those that have one are unable to obtain a regular credit card because of their low credit score. Even though this type of plastic is easy to get, there are certain things you should know about them.

There are good and bad aspects to consider in prepaid credit cards. Let’s look at a couple of them:

Does it have a recognized mode of payment.

Most merchants accept helpful tips stickyregular credit and prepaid credit cards. But over the Internet, some merchants have different policies for prepaid cards. Check the policies first before using your card online. In most cases, you will be able to use your prepaid credit card with no problem at all.

Is it linked to a bank account? Many prepaid credit card issuers require you to have a checking or savings account.  But re-loadable cards are also available. They are very popular since most people do not like to connect their bank accounts to their prepaid debit cards.

No credit check required.

Good credit is not required when obtaining a prepaid card. This is one way of helping people with bad credit. Even if you have bad credit, or no credit history at all, the no credit check policy qualifies most prepaid card applicants. Unfortunately, this type of card cannot help you rebuild your credit because they do not report account activities to any of the major credit bureaus.

These cards require you to add funds before they can be used. They can be reloaded by using your checking or savings account. Funds are transferred directly. You can also get funds from store locations but there is a nominal fee of up to $5 for this type of transaction.

Large user fees.

Some prepaid credit cards charge a large fee. There is also a monthly maintenance fee as high as $10 along with an activation and set up fee. The card only stay active if you pay the monthly and annual fees. There are also overdraft fees for those that exceed their balance. This is something that people do not know when they first get their prepaid credit cards.

Prepaid credit card rewards.

Similar to regular credit cards, many of the prepaid credit cards offer rewards. If you have the READYdebit Platinum Visa Prepaid Card, be prepared to pay a monthly fee of $14.95, which adds up to almost $180 per year. So before you sign up for a prepaid card with rewards, make sure you are willing to pay the extra fees.

Card protection options.

If you happen to lose your card, or if it is stolen, you will be issued a new card with the original balance. Not all prepaid card issuers do this though. You should also know that prepaid cardholders are not protected the same way as regular credit card users. This means you have to personally dispute fraudulent purchases if your card is stolen.

BadCreditResources.com offers resources that specialize in providing Prepaid Credit Crads. Also check other offer for Loans for People with Bad Credit.

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About Shelly Evans

Shelly Evans is a freelance writer and loan consultant. She specialize in writing articles about obtaining financing despite having bad credit. She has more than 16 years in consumer credit and collections and 4 years in business financing.

6 replies on “What You Should Know About Prepaid Credit Cards”

  • img-8
    Tyler D
    July 28, 2013 at 3:53 pm

    I have received both my new prepaid VISA and MasterCard and just wanted to take a minute to thank you for your advice Shelly. I was getting so frustrated at not being able to order anything online, but worst not being to rent a car or book a hotel for business travel which I have to do all the time. Even if you want to pay cash, you still need to guarantee with a credit card and it was proving a huge problem. Thanks again!

  • img-9
    Murray S
    July 29, 2013 at 2:17 pm

    I great article Sandy. I just wanted to add that there are non-bank financial companies like Money Mart that issue prepaid credit cards that do not require anything more from you when applying for a card.

  • img-10
    Evan W
    July 29, 2013 at 3:18 pm

    At the moment a prepaid credit card is all I am able to get, so I appreciate the tips and information in this and the other articles on your site with all the advice about how to get one and what to look for when doing so.

  • img-11
    Shelly Evans
    August 5, 2013 at 6:19 am

    Hi Evan, Prepaid debit cards are great! Don’t feel bad if they are the only ones you can get right now. Your heading in the right direction for rebuilding your credit. Just make sure they have the credit builder feature and they are reporting to at least 1 credit report. For a list of our pre-paid debit cards click here. If you have some money in savings you should also consider a secured credit card again make sure it reports to the credit bureaus and we have found that secured credit cards are another great way to build or rebuild credit.

    Good luck!
    Shelly

  • img-12
    Shelly Evans
    August 7, 2013 at 6:01 am

    You’re welcome Tyler! I hope you will enjoy with your up coming vacations and online shopping!

  • img-13
    Shelly Evans
    August 20, 2013 at 5:29 am

    Hi Murray,

    Yes there are prepaid cards that do not require anything more. But it would be good to get it those from banks so if stolen or lost they can replace you with a new one. And not only that you can also have extra feature like card protection.

    Cheers!

    Shelly

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