Prepaid credit cards

There are a lot of people who have either no credit history or a bad one. This usually prevents them from getting a credit card. Unfortunately it is hard to get by in the modern world without a credit card. For people who do have credit problems a prepaid credit card is often a good solution to the problem. It acts like a credit card but doesn't require that you have a good credit history.

Strictly speaking prepaid credit cards are not credit cards at all since you are not actually borrowing money. Instead you deposit a certain amount of money onto the card and then as you use it that money is deducted from your balance. They are generally accepted like credit card and most things that you would a credit card to pay for can also be paid for with a prepaid card. This makes them ideal for people who need a credit card but don't have the credit history to get one.

The obvious advantage that is offered by a prepaid credit card is that you won't go into debt if you have one. Given the number of people who have trouble with credit card debt this is not an insignificant benefit. You will be able to get most of the benefits of having a credit card without actually having to have one. The other advantage that prepaid credit cards have is that they are usually much cheaper to use than a regular credit card. Since there is no interest charged on the card the only cost is a small fee every time you load money onto the card.

There are a few disadvantages to having a prepaid credit card that you are going to have to consider if you are thinking about getting one. The biggest is that since you aren't actually borrowing any money it won't affect your credit rating. While for a lot of people this can be a good thing since it prevents them from making it any worse. However for most people you are going to want to have some way of building a credit history. You won't be able to do this with a prepaid credit card so you will need to find another way to do it.

The other disadvantage of a prepaid credit card is that there are still situations where you can't use it like you would a credit card. This is mainly for things where you are using the credit card as security. For example you won't be able to reserve a hotel room or rent a car with a prepaid credit card. These may seem like fairly small examples but if you need to do it you will appreciate having a proper credit card. While prepaid cards certainly have their place you are going to want to have at least one proper credit card to go along with it.