Why Your Credit History Doesn't Matter To Prepaid Cards
Why Your Credit History Doesn't Matter To Prepaid Cards
Prepaid credit cards are becoming more popular in the UK for several reasons. For example, they can be used to make purchases just about anywhere such as the internet, grocery shopping, petrol, doctor's visits as well as for ATM withdrawals.
The biggest advantage of using a prepaid card is that you will never have any debt problems while using them. The money that you have deposited on to your card from your savings or bank account is the only money you can spend - you can't spend more than is loaded on to the card when you make your purchases.
In contrast to credit cards, prepaid cards do not require you to undergo a check of your credit score rating. The fact that the funds that they use are based on the money loaded on to the card helps to eliminate the need for any credit background checks. If you make a purchase and you do not have enough money on your card to cover it in then your card will simply come back as declined and you will be unable to make this particular purchase (you won't be fined either, whereas you would with a debit card if you didn't have an overdraft pre-arranged with your bank). There is no way to go overdrawn or end up in a situation where you will owe money to a vendor or bank.
Most prepaid credit cards will say that they will help you repair your credit by reporting directly to the credit bureau. You will have to compare prepaid cards to determine particular ones which have this feature.