All about Prepaid Credit Card and Debit Credit Cards - Compare & Apply for the Best Offers
All about Prepaid Credit Card and Debit Credit Cards
Prepaid credit cards are popularly called stored value cards. They are best suited for people who have a bad credit rating, are unemployed or are unable to acquire an unsecured credit card. They are also ideal for people who are unable to curb their expenditures. Prepaid Credit Cards prevent people from spending beyond their affordable limits as well as attaining credit card debt. If you are in the process of establishing your creditworthiness, ensure that your cardholder transactions are notified to the credit bureaus namely Experian, Equifax and Trans Union by your prepaid credit card issuer.
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Prepaid cards are very simple to acquire. They carry no credit check nor do they need to be authenticated by any employer. This is so because in a prepaid card you are using your own money and not that of the credit card issuer. The prepaid card carries a spending limit only to the extent of the funds that you put in the prepaid account. Also, the prepaid credit card will have the Visa or Master Card logo and can be used virtually everywhere. The exceptions sometimes are few car rental agencies and whilst setting up of automatic recurring payments.
Difference between a Prepaid Credit Card and a Debit Credit Card
In a prepaid credit card the funds that you spend are decreased from those that you have put into the prepaid credit card account. In a debit credit card, however, the money is deducted from your checking account. The debit credit card may levy a charge known as Non-Sufficient Funds (NSF) charge. These charges on a debit credit card come into play when a customer tends to draw money from an ATM or makes purchases that go beyond the limit of their checking accounts. The chances of this happening in a prepaid credit card as compared to a debit credit card are non-existent as the customer can only spend as much money as he has put in to his prepaid credit card account. Thus it also follows that the prepaid card unlike the debit credit card will attract no interest as the funds used are your own. The only time a fee may be levied is at the time of set up or application which is when you are in the process of acquiring a prepaid credit card or when you top up your prepaid credit card by putting more money into your account. The prepaid credit card can be funded either by a wire transfer or a cash deposit at some pre-determined locations as decided by the issuer.
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