No, but there are free prepaid debit cards and more people refer to them as prepaid credit cards for simplicity. Prepaid credit and debit cards are all the rage with the nation’s largest credit issuers. American Express and Discover have recently jumped on the prepaid card bandwagon along with Visa and MasterCard, offering these highly competitive cards to their worldwide customer base.
Searching the Internet is a snap with the credit card finder, where you’ll find the best deals on credit cards for all your needs, including the newest prepaid credit cards!
American Express now offers three prepaid card programs and they are all free! There are no annual or monthly fees, no customer service fees, credit checks, transaction fees or overdraft fees. AMEX allows one free ATM withdrawal per month but then charges $2 per withdrawal.
Can students still get credit cards?
Students used to be a huge market for credit card issuers, but issuing cards to younger people who often only worked part time, or didn’t work at all while pursuing their studies, became problematic. Many student cardholders were unable to meet their credit obligations and defaulted on their payments.
The Credit Card Act of 2009 made significant changes in the law regarding students.
Credit card companies can no longer issue cards to anyone under 21, unless the individual can prove sufficient income or has a co-signer willing to assume responsibility for the account.
The Act also prohibited card issuers from targeting students in campus marketing campaigns and at campus sporting events. Gifts and other promotional items that had been freely distributed to students have also been prohibited.
These changes have also led to the increased popularity of prepaid credit cards. Parents can now apply for family card programs that provide a card for each family member, under a single account. One advantage is that each card can have a separate spending limit, set by the head of the
household.
What should I look for in a prepaid card?
First, look for a card that is free, or one with minimum charges. You’ll also want a card that is flexible, with a company that will provide consistently good customer support. Organizations like J.D. Powers and Associates, conduct annual consumer surveys to determine which companies provide the best service.
You might also want to check with your local Better Business Bureau to find out if any complaints have been filed against a company that you might be considering for credit services.
Once you’ve selected a company that provides excellent customer service, look for the other benefits that are attached to that company’s prepaid cards, such as travel services, credit card theft protection and/or insurance plans and most especially, bonus or rewards programs.
What if I still want a traditional credit card?
Good old regular credit cards are still plentiful, but you’ll find they’re tougher to qualify for. Interest rates and fees are significantly higher, and credit limits are sharply lower than just a few short years ago.
Interest rates are still at historic lows, so why am I paying such a high rate for my credit card?
It seems like just yesterday that credit card companies were falling all over themselves to woo our business away from the competition. Low, low interest rates and high, high credit limits fueled aggressive marketing campaigns by the nation’s largest banks.
Unfortunately, many of these lending practices were unprofitable and unwise, directly contributing to the closure and subsequent takeover of many large U.S. banking concerns. The banks that survived the financial crisis and recession were forced to:
- Tighten qualifying rules
- Hike interest rates
- Reduce credit limits
What are current credit card rates?
Personal card rates currently average between 14 and 16%. For business owners, card rates tend to be marginally lower, averaging 14 – 15%. For consumers that have had credit difficulties, cards are still available, but interest rates are likely to be between 25 and 30%.
This is yet another reason to consider switching from traditional credit accounts to prepaid type cards. Not only do consumers save money, they no longer run up debt, which now or later will have to be paid back. Prepaid cards are a great idea whose time has come!
For the lowest rates and best terms on traditional and prepaid credit cards, click on the credit card chaser and get online credit card rates now!
