subject: Prepaid Cards: You Can Build Your Credit At The Same Time! [print this page] Prepaid Cards: You Can Build Your Credit At The Same Time!
A prepaid card is any card that has money put in there ahead of time in order to be spent, but once the money is gone, it is gone unless more money is added into the card. A prepaid card is different than a gift card in that a gift card is money that is added into the card as a gift from someone else, or from someplace else. A prepaid card is generally money that you put on the card yourself.
There are many reasons why people use prepaid cards. One of the main reasons is they are afraid of not being able to pay if they use the money on credit (such as on a regular credit card), and then they will have interest to pay, making it even harder to make their payments. Basically, they are afraid of going into debt. Prepaid cards give you the piece of mind that whatever money you are spending, you have already paid for it by putting it in your card.
Although paying off your balance in full on a regular credit card helps to build your credit, it is possible to build your credit if you use a prepaid credit card instead of a prepaid debit card, but chances are, you will have to pay a fee to use that feature. It is very important to build up your credit, however, just in case you need to use credit to purchase something, such as needing a loan. You never know when situations may arise that would require you to need more money than what you have, such as financial emergencies. It is therefore always good to be prepared with good credit. Good credit will enable to you get low interest rates. So, it is possible to build good credit while using a prepaid card, but you may need to shop around since only some prepaid credit cards offer this feature.
