For some individuals, a prepaid credit card is an easy alternative to a regular checking account. You can purchase prepaid credit cards at most online retail stores, in many banks, and even at your local bank.
Prepaid credit cards provide you the option of spending the money on whatever it is you need without worrying about a balance being placed on your account. In contrast, with a traditional credit card, you will usually have a certain amount of money in the bank when you open the account. This money is called your “credit limit”. The more credit limit you have, the greater your purchasing power.
Prepaid cards typically charge you a higher rate of interest than regular credit cards. However, the savings that you may make on purchases will more than offset this small initial expense and allow you to pay it off each month, if not sooner.
Another benefit of the prepaid credit card is the fact that it can be used anywhere that accepts credit cards. Most major retailers like Wal-Mart, Target, Toys-R-Us, CVS, etc.
The downside to the prepaid credit card is that many banks will not issue a card to anyone who has not been approved for a regular credit card with them. Also, there are still restrictions on how much money you can spend using the card at a time. Prepaid cards are not accepted in all locations. This includes ATMs and gas stations.
Another benefit of a prepaid debit card over a credit card is that you can’t access your money unless you use it up first. If you happen to have cash in your pocket, you can reload it into your prepaid account in the event that you need to purchase something you don’t want to use right away. This can be particularly useful if you’re out of cash, or just need some extra money for a few minutes without incurring additional fees.
Of course, a debit card can come with some drawbacks as well. For example, they are not accepted by many establishments that accept plastic. Although you can purchase prepaid cards at stores that offer these services, there is usually a small fee for them. Also, you will usually have to pay higher monthly fees for them.
Prepaid cards can be an excellent choice for many individuals. With a little research and comparison you should find that they are a simple way to help you avoid paying high overdraft fees and other unexpected charges on your account.
If you’re thinking about applying for a prepaid card, it is a good idea to do some research online. You should also find a company that offers you a very low annual percentage rate (APR), which means that you can expect to save quite a bit of money by using your card.
One of the most obvious benefits of a prepaid credit card is the ability to avoid the inconvenience of having to carry around large amounts of cash. Instead of having to dig through drawers, cabinets, or plastic bags to locate your money when you want it, you simply swipe your card when you need to make purchases.
One of the cons of having a card like this is the fact that you must carry your card with you at all times. If you carry it in your purse or wallet, you will need to make sure that it is accessible. If you lose it, you can lose the money you spent on purchases as well. You may also have to look for it later.
It is also important that you understand the limitations of a prepaid card. For example, if you do not make your purchases in order to keep your balance as low as possible, you may find that you run out of money before you get a couple of days worth. This can cause your overdraft limit to go up to a certain level.
If you need your bank account to be open, a prepaid debit card can be the best option for you. They may charge you a monthly fee if you do not open an account with them. Because this card is tied to a checking or savings account, you can use it to make purchases, but you will not be able to access it when you want it without opening an account.