The content is accurate at the time of publication and is subject to change.

Research: All You Need To Know About Pre-Paid Cards -

Prepaid credit cards are not exclusive, and in fact almost anyone can get one. They’re a good money manager for young children,as well as a last resort for adults who may not have a bank account or good credit. Keep in mind that these cards carry an impressive list of fees, and pages upon pages of fine print. You can blame this on the fact that pre-paid credit cards are not real credit cards. Real credit cards involve a borrower and a consumer, pre-paid credit cards use money that the consumer “loads” onto the account for consumption purchases.

While a pre-paid credit card is not a credit card, it can be helpful when booking a hotel or renting a car, which all require a credit card number for reservation security. Securing a hotel doesn’t require any credit whatsoever, but for reasons such as this people without a credit card can find themselves behind the times.

For educational purposes, it’s best to take the word ‘credit’ out of the pre-paid credit card. Pre-paid credit cards ring up at the cashier like gift cards, deducting the purchase price from your balance. It is up to the consumer to refill their card when funds are running low, but be careful when checking funds, as it comes with a price as well. Some pre-paid cards charge $2 for a balance inquiry.

Because pre-paid cards are not real credit cards, it would make sense that the credit-card issuer would not charge a pre-paid account holder any fees. But that is not the case, because the pre-paid card is a card issued by the bank, it is subject to a heap of banking fees. Even though, you “load” the money on a pre-paid card, you can still be charged overdraft fees, if you make a purchase that your account can’t cover.

In spite of the fees, many people are still pulled in by the pre-paid credit card allure. This is for a variety of reasons, but it could be due to the fact that when you don’t have a credit card in the new millennium, many doors seem to close in your face. If you do decide to get a pre-paid credit card, remember that it is not a credit card — it’s a costly gift card. Also, if you go down the route of pre-paid credit card, read the fine print over at least three times, and remember the fees that are associated with card — from sign up fees, to “loading” fees, ATM withdrawal fees, and customer service fees.

Pre-paid Cards of Note:

Mango Mastercard. This card doesn’t require an activation fee or direct deposit fee, and offers a $20 sign-on bonus.

UPside Visa.This card requires negligible signup fees. There is a monthly charge though, if you “load” over $500 to your card monthly, then your account will be deducted $0.99 a month. For any deposits under that there is a $2.99 monthly surcharge.