Life can be pretty difficult if you happen to be in the unfortunate position of having less than perfect credit.The fact that credit is almost impossible to get even if you really need it is bad enough, but, life in the USA today without a credit card is nigh on impossible. Booking a hotel room, hiring a car, buying products online, hiring equipment and many other straightforward activities require a valid credit card with no “if’s or but’s”.
Many people have been in this position but have managed regain decent credit scores through the use of prepaid credit cards. The great thing about prepaid cards is that there are generally no checks or qualifications required – no credit score, no employer contact and no guarantors required. In a nutshell anyone can get a prepaid card, they simply have to deposit funds to provide the credit limit required. Essentially it is a debit card as no credit is offered. However it can be used in any outlet or retailer, on or offline, that accepts conventional credit cards.
It is a little known fact there are prepaid card companies who report on the conduct of your card to credit bureau’s and therefore can have a positive impact on your credit score over a period of time. If you want to improve your credit profile it is important to make sure the card issuer will report to a credit bureau. If this is not the case then the prepaid card will have no effect on your credit score whatsoever.
As with all financial products aimed at those who have credit problems there are usually fees attached with usage. Make sure and compare these cards on a like for like basis prior to committing yourself. Most companies will charge a fee for issuing the card or opening the account in the first place, this fee is usually an annual charge of anywhere from $30-$100. Then they also charge fees every time card is used to make payment or withdraw funds from ATM. Some even charge for loading funds onto the card itself!
Prepaid credit cards generally do not come with benefits like air miles or reward points, but occasionally prepaid companies will offer such benefits to increase their customer base, so if you come across such offers it is generally a good idea to take advantage of them as long as you are not being charged excessive fees for the privilege.
Another point to consider is how easy will it be for you to put credit on the card? A good prepaid card will have arrangements with many nationwide institutions across the country making it simple and convenient to fund the card, some will even allow you to fund deposits directly with your paycheck.