There are a number of prepaid credit card companies out there and finding a list of them shouldn’t be too hard. A simple search for prepaid credit card on Google will give you a long list of choices. In fact, it will almost give you too much information to handle.
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Special credit card comparison sites often provide easy-to-read information about credit card companies, including prepaid credit card companies. These are excellent tools to help you find the lowest fees and most widely accepted cards. They can also help you to compare prepaid credit cards to debit cards, secured credit cards and other classes of credit card to see which type best suits your needs.
What are the advantages of prepaid credit cards?
In this day and age, everyone needs a credit card, and sometimes prepaid cards are the best or only option. Credit cards are invaluable for shopping online or by telephone, using pay at the pump at gas stations or using self-checkout at the supermarket. You cannot reserve a hotel room or get a rental car without a credit card these days, so for those who can’t get a different type of credit card, prepaid credit cards are their only hope.
There is no credit check on prepaid credit cards, so even people who have bad credit and would not qualify for a different type of card would be able to get a prepaid card. This also speeds up the process greatly, since there is no waiting for forms to be processed or a credit check to be completed. If you’re unsure if you have a good credit score, or enough to qualify for a different type of credit card, you can check a credit bureau like TransUnion.
There is total anonymity when you buy a prepaid credit card. If you are purchasing something from someone whom you don’t want to have your personal information, a prepaid card can be a great way to do it. In addition, since it makes no difference who uses a prepaid card, they make good gifts.
Prepaid credit cards are an effective way to limit spending because when you buy a card, it has a set limit that you pay up front. In many cases, you cannot reload the card, so that limit is the most you can spend. Even if the card can be reloaded, there is a fee and a process involved, so you will think twice before doing it.
What are the disadvantages of prepaid credit cards?
Because prepaid cards are anonymous and do not require a credit check, they do not build credit history. It is a double-edged sword, the vendor doesn’t know who you are when you buy something, but neither do the credit bureaus.
While prepaid cards are accepted in many places, they are not accepted everywhere that regular credit cards are. Unfortunately, you usually don’t know if the card is going to be accepted or not at a particular business until the transaction is underway, which can be embarrassing and inconvenient.
There is no such thing as free prepaid credit cards. Not only do you have to pay for the value of the card; you also have to pay an activation fee, which is often 10% or more of the value of the card. In addition, some cards, particularly the ones that can be reloaded, have monthly fees that draw down the value of the card according to an article in the New York Times.
Where can I get a prepaid credit card?
You can easily purchase a prepaid credit card. They are for sale at grocery stores, gas stations, convenience stores, department stores and many other locations where you can just pick the one you want from a rack. You can also find them at online card shopping sites.
Is it better to get a prepaid credit card or a store gift card as a gift for someone?
A prepaid credit card is often harder on the gift giver, because of the activation fee, but much better for the recipient because it can be used at so many different locations. A store gift card can only be used at a single store or group of stores, but store gift cards rarely have fees of any kind. Which kind is a better gift depends on how much flexibility the recipient needs in where they can spend the card.
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