Prepaid Credit Cards

Many Americans struggle with managing their finances either through credit cards, debits cards or bank accounts. Another option that is available for those who do not have bank accounts, have bad credit or who have a hard time managing their money is the prepaid credit card.

A prepaid credit card allows you to have your paycheck, unemployment or benefits loaded onto a credit card which can be used like a debit or checkcard. The credit cards work like prepaid telephone calling cards.

A prepaid credit card eliminates check cashing fees, checks lost in the mail and provide easy access to your money. You can add additional money to your card at various locations based on the company you signed up with. There is no credit check or other requirements to obtain a prepaid credit card.

Several companies such as Western Union, Account Now, Visa, MasterCard or the American Express Pass for teens offer prepaid credit cards. You can also comparison shop on sites like creditcards.com or bankrate.com to find the right prepaid credit card for you.

Your credit card cash balance works like a credit limit on a traditional credit card. You will not be charged a fee for overdrawing your account. There is no minimum balance and free direct deposit. Some companies also offer online banking and bill payment. You will never be charged late fees or interest. However, you may be charged registration fees or other charges for using the prepaid credit card. Extra fees may also be charged for adding additional money to the credit card outside of your regular deposits.

Prepaid credit cards help control your spending. You can control over your spending limits and are great option for teens or college students. Once you activate the card you are able to start using it. Each time you make a purchase the amount is automatically deducted from your credit card balance. This forces you to keep track of your balance so you will never go over your limit because you can only spend the money you have on your card.

Be sure the company reports your payment history on your credit report to help establish your credit history or improve your existing credit history.