Are prepaid credit cards worth owning?

In case you are keeping up with the latest news in the credit card industry, you will know that the Kardashians have partnered with Mobile Resource Card, and come up with their own prepaid MasterCard. This prepaid credit card is being promoted as a convenient and quick way of managing one`s money. However, one must realize that this convenience certainly comes at a price. The credit card, according to some consumer reports, has the same types of hidden fees and weak protection for the consumer as most other prepaid credit cards. The fee includes 1.5 dollars for every ATM withdrawal. There is a dollar fee even when the point of sale transaction or withdrawal at the ATM is denied. There is also a 9.95 dollars fee when the credit card is lost or stolen. Cancelling the credit card will also cost the customer 6 dollars.

Customers have the option of going for ahalf yearly plan, that will cost 59.95 dollars, which includes the purchasing fee, monthly fee for the entire plan and the entire deposit. There is also a 12 month plan, which will cost about 99.95 dollars including the same fee as the shorter plan. The prepaid credit cards have quite a few drawbacks. The fee keeps varying to start with, and the activation fee ranges between 0 - 29.95 dollars. There is also a monthly fee, which could be as high as 10 dollars. Another disadvantage is that there is no protection available on the debit cards. Federal law does not mandate protection on prepaid credit cards. The cardholder is liable for 50 dollars for fraudulent charges reported within 2 days of a stolen card. The liability increases to 500 dollars when a stolen or last card is reported beyond 2 days and before 60 days.

There are quite a few benefits of using the prepaid credit card as well. It can be used as a credit card for online transactions as well as point of sale transactions. Funds can be spent only up to the extent the card has been loaded, so customers can never really find themselves in massive debts. There isn`t a chance for late fees or missing monthly payments. Most importantly, customers can obtain this credit card even when they have bad credit history. In fact, this credit card can help develop a good credit history. Customers should always review the fee structure before opting for this credit card.

Jennifer Brown

Jennifer Brown, an external business consultant working with a Fortune 500 company, has years of experience to her credit. Despite having a busy schedule through the day, she takes time out to write articles dealing with credit cards, payday loans and other financial aspects. She has completed her Bachelor degree in Financial Services from Columbia University and has been actively involved in various activities for the betterment of society.