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Friday, January 22nd
Prepaid credit cards are a great resource for managing your spending while still getting the convenience of a traditional card. Because you deposit money to "fund" your prepaid card, it doesn't matter if you have a low credit score or no credit history at all. And, prepaid credit cards make it easy for parents to teach their teens about smart spending, without getting into financial trouble early on.
Why Do You Need a Prepaid Credit Card?
Picture this: you're 18 and in your first year away at college. Suddenly, you've got every credit card company known to man sending you enticing offers of low interest rates, guaranteed approval, and even shiny rewards programs to "make money" . Sounds great, right? Unfortunately, that's how a lot of people - young and older - start to have trouble with money management, with high interest rates on unpaid balances, late fees, and much more.
Prepaid Cards: A Safe Solution
Fortunately, there's a way to safely make purchases the same way you would with a traditional credit card, without the risk of getting in over your head: prepaid cards. Sometimes referred to as a "debit" credit card, these cards are funded by money you deposit in advance. You put in $500, you can spend up to that amount. Try to make a purchase that goes beyond what you've put in, and you'll simply be declined.
For that reason, prepaid cards are popular with parents who want to teach their teenagers (and young adults!) how to use credit wisely, with much less risk. Because these prepaid cards are issued by the same major banks as traditional credit cards, they can be used anywhere those cards are accepted - from gas stations to grocery stores and more.
Prepaid cards can also be given as a gift: unlike cash, these cards can usually be replaced if lost, and they give the recipient an almost unlimited array of choices where they can spend it. That gives this type of card a big advantage over gift cards that are tied to one particular store or company.
What To Look For In A Prepaid Card
So, if you've decided that a prepaid card meets your needs, what should you look for as you decide which specific card to get? Here are some criteria to keep in mind:
TopConsumerReviews.com has partnered with Lending Tree to help you find the best Prepaid Credit Cards in the industry. We hope this information will help you select the perfect card to help you manage your spending - or to give as a gift!
If your credit is imperfect, you have a teenager or young adult that needs access to a Visa or MasterCard or you want to better control your spending a prepaid credit card is a great option. Credit cards not only make for convenient shopping but are also mandatory in many scenarios where a Visa or MasterCard must be made available. For example, shopping online, renting a car, or making reservations all require a credit card and asking someone else to help you out, each and every time, can be embarrassing.
Here are some advantages of a prepaid card:
In summary, a prepaid card offers several perks over a traditional credit card. Many appreciate the budgeting aspect while others enjoy no contracts or accrued interest. Either way, prepaid cards offer a lot of flexibility no matter what you need the card for.