What to Know about Prepaid Credit Cards

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What to Know about Prepaid Credit Cards

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In the old days, consumers could and did mostly rely on cash to pay for most, if not all items, but now days, cash will not get you everywhere. Cash is becoming a local commerce, and credit an international one.

For example, many hotels, cruises and airlines don`t accept just cash. Even if they do accept cash for payment, your credit card number is still required to secure the spot. For people with little or no credit, may find it hard to jump around this, and may be interested in working with a prepaid credit card.

A prepaid credit card allows the consumer to make credit card like purchases without having an actual credit card. These prepaid cards are perfect for young children as well as adults who for whatever reason may not have a bank account or good credit.

Prepaid credit cards are not exclusive, and in fact almost anyone can get one. They just carry a long list of fees, and a wrap sheet of extra tiny fine print. This is because they are not credit cards; so they cannot provide all the perks of a credit card. The prepaid cards ring up like gift cards, because they take from money that has already been "loaded" onto the account. Consumers who are interested in using prepaid cards, must refill or load their card when funds become low, and be aware of the appropriate charges.

Because although this is not a real credit or debit card, it is issued by the bank, and banks will find away to implement fees. For example, beware of overdraft fees, because prepaid cards will still charge you those if you attempt to make a purchase with minimal funds. Choosing a prepaid account can be a little bit of an ordeal, because there is so much fine print and they are not as common as credit cards.

Despite the fees, many people are drawn to prepaid credit cards, because it seems that you simply can`t live without one in 2011. Prepaid credit cards may seem like a last resort to some people, and it can provide necessary financial guidance if used correctly. But these cards are ones that a consumer should monitor frequently, just because the charges for any given service are so high. If you end up overdrafting, then you could hurl yourself even deeper into a financial mess.

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