subject: Did You Get A Prepaid Credit Card [print this page] Many men and women often wonder if they should get a prepaid credit card. For some people it makes sense. Some need the convenience it offers and some need to credit building capability the prepaid card offers. There are many people today who need help building back their credit rating and this might be the answer for them.
The way a prepaid card works is that a person will sign up for a card, pay a small annual fee, fund it and start using it like a regular line of credit. There are no interest fees associated with the card as there would be with a standard credit card because the owner of the card has funded the card with his or her own money. The money spent with the card prevents the person from going into debt because they cannot spend more than they have placed on the card.
The cards are accepted anywhere regular credit cards are used, this includes the ATM. So it is as convenient to use prepaid cards as a standard credit card. This card also helps many people restore their credit rating and can be a financial life saver for many people.
A person's credit history is very important because it ultimately determines not only whether or not a person is approved for a line of credit or loan, but their credit history also determines the amount of interest a person will pay on the loan. It is important for those with a good credit score or history, to maintain their score by paying their bills on time.
People can maintain their high credit score by paying their bills on time. Also, people should strive to keep their available balance over sixty percent of their total line of credit. For instance a person who has a credit limit of ten thousand dollars on one account, should try not to charge more than four thousand dollars on that card in order to maintain a high credit rating.
For those with a few spots on their report, they can use the prepaid card to increase their credit rating. The prepaid card is followed by the credit reporting companies just like a normal credit card.
The person who regularly uses his or her prepaid card, and funds it regularly, is demonstrating financial responsibility. This will not go unnoticed by the reporting companies. After consistent use and consistent funding of the card, the credit card company will reward the owner of the account with a positive credit rating and possibly offer them a traditional credit card.
People can choose from many card companies. And they should realize that even if their credit history is not perfect, they still need to be treated like a top notch customer by the card company. After all, the card holder turning their money over to this company and is not asking for a line of credit. The company that does not treat everyone with respect should be avoided.
The prepaid card offers convenience to some. And for others it offers a way to build back their credit rating.
