Understanding Prepaid Credit Cards

Understanding Prepaid Credit Cards

by Tina Porter

If your credit is poor or severely damaged then you are fully aware of how difficult it can be to obtain a credit card, even one that is secured. You also know that in this day and age it is a necessity to have one. Do not worry. There is a solution to this problem.
Prepaid credit cards can give you the spending freedom that you need without being bound by any type of contract. They are easy to set up and use. All you need to do is open and deposit money into an account with a company that offers them. You control what the limit is because you are the one supplying the funds.The amount you deposit is the amount you have available. You do not have to worry about receiving a monthly bill because you do not owe any money. You will not be charged interest or finance fees because you are not borrowing any money. There is no chance of you ever being late with a payment or going over the limit. Once the balance on your card reaches zero you will no longer be able to use it until you deposit more money into your account, which you do at your own convenience.

It is important to note that these cards also have several limitations. Technically, they are the same as debit cards with the exception that they are not tied to your personal checking or savings account. Your payment history is not monitored so your credit rating will never be affected by them. Also, many companies will charge you a fee to open or deposit money into a prepaid account with them. This fee is usually around $5 or $10. It would be cheaper to open a no cost checking or savings account that automatically comes with a free debit card. Finally, you may find that you are not able to use a prepaid credit card for reoccurring charges, such as a phone bill, Internet subscription, or cable bill. Many companies refuse to accept them for these types of transactions because there is always the chance that the money won't be there when it is time to withdraw it.

A Prepaid credit card works exactly like a normal credit card without all of the hassle. You have total control over every aspect of it, including the limit and availability of funds. While it will not eliminate the damage that is already done to your personal record, it will give you the freedom to purchase those items that you might not be able to buy with cash.

College credit card

College credit card

by JimmyW

College credit cards are the credit cards that have been specially designed for college students. College credit cards are more popularly known as student credit cards. College credit cards allow the students to experience the benefits of credit cards much earlier in their life. Through college credit cards, the college students are able to learn more about credit cards and their use. In fact, for most of the students, their college credit card is their first credit card that acts as a gateway to the world of credit cards. Some other students might have previously used supplementary credit cards linked to their father's credit card account; however, for such students too, their college credit card is the first one that is truly theirs.

College credit cards are not very different from other types of credit cards in the basic sense; they function in the same way as any credit card would. However, there are some differences, which basically arise from the fact that college credit cards are used by people who have no prior experience with credit cards and who perhaps don't understand the concept of credit cards completely. Hence, the credit card supplier is at risk with issuing credit cards (college credit cards) to such people whom he is not sure about. Most of the students don't have a credit history either. In such a case, the supplier of college credit card cannot be sure of receiving the credit card bill payments in time (and even receiving them at all). To counter such risks, the supplier of college credit card requires the parent of the student to co-sign the college credit card application form as a guarantee. Moreover, the credit limit on college credit cards is generally around $500-$1000 per month, which is lower than what it is for other credit cards (this credit limit is generally sufficient to fulfil the typical needs of a student). Another risk mitigation instrument used by the college credit card suppliers is the interest rate or APR. The APR on college credit cards is generally higher than that for other credit cards. Again, this is done to dissuade the students from overspending on their college credit card (and finally not being able to pay their credit card bills). However, if we were to look at these impositions in a positive sense, we would find that these are actually in favour of the student (who is still getting trained to take on the real world of credit cards). Moreover, college credit cards also help the students in establishing a (good) credit history which is another important benefit that becomes handy when the student needs any type of loan at a later stage in his/her life.

So, college credit cards are really something that every student should consider going for.