cancel

Today's Mortgage Rates


Amount:
- powered by Loan.com

community forums

Featuring over 100 topics of interest to DoItYourselfers.

Benefits and Disadvantages of Prepaid Credit Cards

comments
  • Currently3.03/5 Stars
  • 1
  • 2
  • 3
  • 4
  • 5
out of 632 votes


By Susan M. Keenan
Prepaid credit cards are excellent choices for many people.  In a world that relies on spending and purchasing with plastic, the prepaid credit card can be the answer to ending an escalating path of debt. 

Prepaid credit cards permit the convenience of spending without using cash or checks.  They also limit the possibility of overspending.  The credit limit on a prepaid credit card is determined by the amount of cash a consumer puts to the purchase of the card.  Prepaid credit cards are used in the exact same way as regular credit cards.
 

Benefits to prepaid credit cards

•    The application process to acquire a prepaid credit card is simple.
•    No credit report checks are done.
•    No income requirements exist.
•    No background check on the purchaser is necessary.
•    No interest charges will accrue and add to the cost of using a prepaid credit card.
•    Prepaid credit cards are easily accessible.  They are available for purchase in numerous locations, in fact, anywhere that credit cards are accepted.
•    Prepaid credit cards are widely accepted in the same manner as traditional credit cards.
•    Prepaid credit cards look like typical credit cards.  Therefore, not even the store clerks can tell that you are using one.
•    Prepaid credit cards are terrific options for individuals who have bad credit histories.
•    Excessive debt can be avoided with prepaid credit cards since you can only spend what you have already paid for in advance.
•    They can be used to gradually help a teenager gain control over his or her finances.

Disadvantages to prepaid credit cards

•    The individual making the purchase of a prepaid credit card must have the cash to pay for it up front.
•    Prepaid credit cards cannot be used for any automatic monthly billing charges or payments.
•    A set up fee is usually charged.  This can be quite expensive, depending upon the origin or location of purchase.
•    Keeping an idea of the balance available on the card may prove to be troublesome.  Although this is usually a minor facet, it can be a problem if you arrive at the check out and there isn’t enough money left on the prepaid credit card.

© Doityourself.com 2006

 


member comments

or Register to leave a comment.

If you have a question you would like answered, please visit our Community Forums.

articles we like

Japanese Beetle - Fighting with Mechanical Traps

Japanese Beetle - Fighting with Mechanical TrapsInformation on the Japanese Beetle and how to control it in your yard or garden... read more

A Citizens Guide to Radon: Lowering Radon Levels

Tips that will help you reduce the overall radon level in your home... read more

How to Destroy Acne Without Destroying Your Skin

How to Destroy Acne Without Destroying Your Skinin order to truly treat and prevent acne and other types of skin blemishes, you... read more

sponsored articles of the day

diy centers

Research and explore a wealth of wisdom on these topics