Prepaid credit cards are becoming more and more popular. As Americans find themselves stretched to financial limits, these cards have become a way to avoid overspending.
A prepaid credit card works just like a regular credit card, except you have to pay before you use it. Such cards are available everywhere and offered by most major card issuers. American Express, Master Card, and Visa all offer prepaid credit cards. They even look so similar to their brethren that it’s hard to distinguish the prepaid card from the standard credit card.
You can make any type of purchase you would normally make with a regular card, however, some restrictions due apply. Generally, you cannot use a such card for hotel accommodations, airfare, or auto rental, as these purchases require your card to attach to your name, address and personal information for obvious reasons. Your card is anonymous, is doesn’t attach to your name or personal information in any way. Also, gasoline retailers often restrict prepaid credit cards because of the drive-away syndrome.
A prepaid credit card is a good option if you are in tight financial circumstances. Because you pay ahead (load the card), you can’t really purchase beyond your means and there is no balance to carry forward.
Apart from the restrictions we have already discussed there may be associated fees for your prepaid cards. Such cards also come in many forms. At the rear of your Pharmacy or in Wal-Mart’s somewhere you will find a display featuring various prepaid cards. These are offered for preset amounts and you pay that amount plus charges at the cashier while checking out. You might purchase a $20.00 prepaid card from the display. At the checkout this card will cost around $25.00 because of associated fees. Once you’ve paid your $25.00. However, you’re done. There are no more charges and no fluctuating interest rates.
Other types of prepaid cards are one you can load to amounts you decide upon. These cards are usually issued by one of the Major credit card companies like VISA, or Master Card. You generally receive the card after applying for it and including your first deposit on the card. The card is issued to you and you can use it for anything up to the amount left in your account less fees for use. These cards allow you the option of refilling, or loading, your card whenever you want. While there are fees for using the card, they are pretty clear cut and you should check them out and no the costs involved before making an initial deposit.
Using either of these types of cards is a good solution to stop overspending until you get your financial situation ironed out.
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