Pre Paid Credit Cards - Fantastic Plastic Without the Bills by:Margaret Winfrey
Pre paid credit cards have been around for a few years now, but it's just recently that they have seen a significant rise in popularity. With the economic world feeling the pinch, and spiralling credit problems facing almost everyone, pre pay credit cards have become one of the most useful ways of receiving and making payments, without the risk of running up credit card bills for the future.
There is no doubt at all that paying by plastic is quick and convenient. Unlike carrying money with you, a credit or debit card presents great convenience and security. You might lose your wallet, and then your money will certainly be lost. However, your card is generally only of any use if someone knows your PIN.
Increasingly retailers are preferring credit card payments, with some now no longer accepting checks as payment. Cash is obviously still accepted, but there are some people who have expressed a certain degree of scepticism as far as how long even this might remain, at least as a main form of payment rather than a mere novelty!
Paying by plastic helps to increase security and speed up payments. There is also the online advantage to consider. These days very few people would trust sending cash by post in order to pay for something online, and in any case, one of the benefits of buying online is the ability to pay for, and complete, the entire transaction at the same time.
But the only way in which you can pay for items and services online securely is to use a card of some kind. This can prove very difficult for those people who are unable to obtain a credit card.
There are many reasons why someone may not be able to open a standard credit card account. Some people may be too young, with those just having left school and with no job being refused, especially during the current financial situation. Of course, those with poor credit will always have found it difficult to obtain credit, and credit cards may well have been entirely beyond their reach.
Today, with credit companies increasingly feeling the strain and pressure, it has become even harder to obtain credit, and those with even moderate issues on their credit file are finding it harder, or even impossible, to obtain such a facility.
It may even be that someone may not have a credit file at all, or at least one with no data on it. If somebody with no previous credit record applies for a credit card they will normally be declined the card. It must also be accepted that there are plenty of people who, for personal reasons, have no desire to have a regular credit card and offer themselves the potential access to thousands of dollars that they neither have nor need.
Pre paid credit cards get round all of these solutions, because there is usually no need for any kind of credit check to be carried out. There is therefore virtually no age limit, no problem with people having poor or disastrous credit records, and even those who have judgements or previous bankruptcy might be able to be given such a card.
This means that, within a certain degree of reason, almost anyone can successfully apply for a pre paid credit card, providing them with immediate access to the same facilities granted to those who have a standard credit card facility. Pre paid cards offer those who do not qualify for a regular credit card to use plastic to pay for goods and services when needed.
Since there is no actual credit facility, there is no danger in running up a bill. You simply credit the card in the same way as you would put credit onto a pr-paid cell phone. Once the funds have cleared they are then immediately available, and the card will work in exactly the same way as any standard credit card. The store owner will never know whether the card is pre paid or not, as they work in exactly the same way as a standard card.
You may well find that there are certain charges associated with using pre paid credit cards, and this might include an initial fee to open the account, fees for topping up the card, and fees for using the card. These fees can vary widely, and so it might be worth shopping around to compare rates and charges. This is fair enough, because there is no interest rate on such cards, and that is how regular cards are financed - from the interest rate.
For instance, you may find that some pre paid credit cards have lower rates, but charge quite high fees for withdrawing cash from an ATM. If this isn't a facility you're likely to want to use, then you will need to decide how you intend to use the pre pay card, and which combination of charges and costs represents the best deal for you personally.
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For more information on pre paid credit cards and more, go to MyCreditCard.com where you can compare pre paid credit cards and other credit card offers and applications from major banks and issuers.