Learn about prepaid credit cards and how these are hybrid, alternative to banks and are available to persons with bad or poor credit.
The Definition of Prepaid Credit Cards
Well, prepaid credit cards are cards that let one load cash on them and spend anywhere debit or credit cards are accepted. These cards are good to get if one is usually rejected for a loan or given to teens to help teach them on responsible spending of money. The following therefore, is a list of things you need to know about prepaid credit cards.
Prepaid cards are a hybrid
What looks and act like a credit card is not always a credit card since although it is often called a prepaid card, and probably looks like one, prepaid credit card works more like a debit card than a credit card. To use it, one choose the amount of money to put on the card and as they spend, their purchases are deducted from the total balance. When the amount of money gets low, it can always be added at the bearer’s wish.
They are an alternative to banks
For over eighty million people living in the United States who does not prefer using the banks, a prepaid credit card makes it possible for them to enjoy life as if they were using the banks. Without the need of linking you to a bank, prepaid credit card allows one to do things that would otherwise require bank details like renting a car or booking a hotel room. They even come with account routing numbers so that one can have their paycheck directly paid to the bank without physically appearing at the banking halls.
They are available to those with poor or no credit
In situations where your credit history is either none existent or thin and that a normal credit card issuer is not in a position to issue a normal credit card, then prepaid credit card will be of great benefit since there is generally no credit history to follow while giving out prepaid credit cards. This is because one can not spend beyond the loaded amount of money in the card therefore, there will not be any issue affecting it at all.