Prepaid Credit Cards – How They Work
A prepaid credit card is perfect for individuals than have little or no credit history. It is also a great alternative to a bank account.
This is how prepaid credit cards work; first you deposit funds into your account/card. You use your card to pay bills or make purchases. Then the funds are taken from your account to pay for the purchases.
You can deposit funds using direct deposit, money gram, western union and a variety of other methods. Most cards offer free direct deposit and this will save you a lot of money by not having to pay for check cashing fees.
There is also a feature most cards offer called bill pay. This feature allows you to use your account to write physical checks. You can pay bills such as rent, cable, and electric or write a check to an individual. This can save you money by not having to pay for expensive money orders.
You can also use you card at ATM’s to access cash. You will never have to pay interest or overdraft fees with a prepaid credit card.
Many cards also offer another feature called credit builder. This feature will record your payments made through bill pay. It then reports them to a credit reporting agency. This can be used to show future lenders your credit worthiness.
These cards will be issued as a visa or mastercard. This means your card will be accepted everywhere the visa or mastercard logo is displayed. You can also use your card online and over the phone. You card will not say prepaid on it so no one will ever no the difference between your card and an unsecured credit card or bank card.
Prepaid credit cards approve everyone. There is no credit check or chexsystems verification. Thus you will be approved no matter your credit history.
In sum, prepaid credit cards are safer than carrying cash. They can be used just like any credit card. If you don’t have a bank account they are a great alternative and everyone is approved.
I suggest the Account Now – Prepaid Visa because they offer free activation, free credit builder and free bill pay. Here is a review of the account now visa.
