When you choose the right prepaid credit card, it can be a better choice than a secured card. It all depends upon your purpose in getting the card, and as with all credit cards, the benefits to you depend upon the card you choose.
One reason why you might want a pre-paid credit card is that you can have your paychecks deposited directly to your account – eliminating the wait for mail time and eliminating check-cashing fees.
The pre-paid card is essentially a debit card that isn’t tied to a checking account. So you may have access to all of your money. Some cards do require that you maintain a minimum balance.
While a secured credit card is a benefit in that helps you build your credit scores, in order to do so you must treat it just as you would any other credit card – by using only about 30% of your available credit. And since your own money is the security for that credit, it means your funds are tied up.
And, with a secured credit card, any charges you make and don’t repay immediately begin collecting interest. In addition, you may be required to pay an annual fee.
The difference:
If you want a credit card that helps you build your credit scores and allows you the convenience of Internet shopping, reserving a rental car, or purchasing gas when the stations are closed, you need a secured credit card.
If you want a credit card that you’ll use as a substitute for a checking account with a debit card, you need a re-loadable pre-paid credit card.
But don’t just apply for the first card you see. That can lead to paying the kind of fees that eat your money faster than you can deposit it.
Before you make application: Do your research.
Each seems to have a different mix of features, so compare the various offerings and decide which features will offer you the greatest convenience and the lowest cost.
We here at creditscorequick.com have chosen a handful of prepaid cards that we feel offer the best benefits. Compare them and see which card is the best choice for you.
Here are the features to compare before making your choice:
The application fee
The monthly fee
ATM withdrawal fees
Transaction fees
Re-load fees
Transfer fees
Minimum balance requirements
Inactivity fees
Customer service inquiry fees
Statement fees
Account closure fees
Protection from unauthorized transactions – or not
Line of credit availability
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