Have you been refused a credit card or bank account due to a poor credit history? If so, a prepaid debit card could be a solution.
A prepaid card looks like a credit or debit card (ie it is plastic and therefore can be sued for online and telephone purchases as well as in shops and at ATMs etc that accept the card brand). But the difference is that you can only spend what it on the card. This amount will be pre-loaded on to it and once that amount is gone, you then have to top it up again before it can be used.
Given that the prepaid card companies do not lend you money (because you can only spend funds that you have loaded yourself), no credit checks are usually necessary. However, most card providers will carry out an online electronic identity verification process.
Some prepaid cards may also offer an e-bank account, which could be a convenient place for you to have your wages and other funds paid in. This package potentially gives you greater control over your money.
So how can a prepaid card help you manage your money? Here are some ideas:
there is no temptation to overspend. In fact, overspending is impossible because when your money runs out, the card will simply not be accepted until you pay some more money on to it;
there are no late charges. Because the money that you spend is loaded onto the card upfront, there are no repayments to forget, so there is no risk of incurring late charges;
there is no interest. With credit cards, as long as you have an outstanding balance, interest will be racking up on that amount. With pre pay cards there are charges for certain services (eg SMS balance alerts), but these are usually not cumulative in the same way that interest charges are;
you can use different cards for a different purposes. Some people may have a prepaid card for food, another for bills and another for treats and so on. That way, they can distribute their money according to their budget on pay day. Once the treat and food funds are used up on their respective cards, that's it until the next payday;
you can manage your account online - many prepaid debit card providers allow you to keep track of your account online. Not only can you accept electronic funds transfers, but you can also see what you have spent and what you have left; and
if you elect to receive notification of every transaction on your prepaid debit card - which is available from prep pay card service providers - you can keep track of what you have spent as you go along.
Wednesday, November 17, 2010
Why Not a Prepaid Credit Card?
Why not a pre-paid credit card? It's a well tried and tested concept after all and quite straight forward. We're all used to prepaid phone cards, prepaid gift tokens and prepaid gas and electricity meters. The prepaid credit card simply takes the same logic a further step forward, with the added novelty of it being a "credit card without debt"! For those who have struggled to keep spending on their "plastic" within reasonable bounds, prepayment could represent a heaven-sent opportunity to finally knock their domestic budget into shape.
In fact, it's probably something of a misnomer to call it a prepaid credit card, since no credit is involved and, therefore, there's never any interest to pay. Whenever you use it (in exactly the same way you would use any of your other plastic), you'll only be spending money that you've already loaded onto your prepaid card. So, there's never any danger of getting into any debt on a prepaid card.
You load money onto the card in much the same way as any other prepaid facility - namely, by cash, by bank transfer or by using another credit card. Since your prepaid credit card is also a MasterCard or Visa, you can use it anywhere that MasterCard or Visa is accepted, at home or abroad. Using it abroad, of course, would give you a very handy and rather more convenient alternative to carrying travellers' cheques - with the added reassurance that it's not going to let you overspend on your holiday money! Furthermore, if the card is lost or stolen, you can simply contact the issuing company, and they'll send a replacement.
The prepaid card offers the same protection against fraud as regular credit cards. So if you use it to shop online or over the telephone and the card's been used fraudulently, you can recover the loss. A card also offers greater safety than cash when it comes to carrying it around, so it could be an appropriate alternative for use by children or the more vulnerable (the jury's probably still out on this one though, and many issuers still limit the use of prepaid cards to those over the age of 18).
As you can imagine, the issuing companies love the idea of a prepaid card, since your use of them is practically risk-free. There's no need to check your credit status or history, so prepaid credit cards are issued more or less on demand.
So, is there a catch? Not so much a catch, as the relatively high cost at the moment of using a prepaid credit card. Because they're a relatively novel idea, competition in the market has probably not yet brought the costs as low as they might become. In the meantime, therefore, you should make your choice of card-provider on at least some of the following considerations:
* Will you be charged for simply opening a prepaid credit card account?
* Is there a monthly service charge, and, if so, what exactly do you get for it?
* Is there a charge each time you want to load credit onto the card?
* Will the places that accept your cash to top-up the card also charge for that service?
* Is there a charge for using the card or withdrawing cash on it, including internet purchases?
* Will you be charged for having the card sent to you by express delivery?
* Is there a charge for closing your account?
* Will you be charged for replacing the card, in the event that it is lost or stolen?
* Do you have to pay a fee each time the card is renewed (i.e. upon each expiry date)?
In fact, it's probably something of a misnomer to call it a prepaid credit card, since no credit is involved and, therefore, there's never any interest to pay. Whenever you use it (in exactly the same way you would use any of your other plastic), you'll only be spending money that you've already loaded onto your prepaid card. So, there's never any danger of getting into any debt on a prepaid card.
You load money onto the card in much the same way as any other prepaid facility - namely, by cash, by bank transfer or by using another credit card. Since your prepaid credit card is also a MasterCard or Visa, you can use it anywhere that MasterCard or Visa is accepted, at home or abroad. Using it abroad, of course, would give you a very handy and rather more convenient alternative to carrying travellers' cheques - with the added reassurance that it's not going to let you overspend on your holiday money! Furthermore, if the card is lost or stolen, you can simply contact the issuing company, and they'll send a replacement.
The prepaid card offers the same protection against fraud as regular credit cards. So if you use it to shop online or over the telephone and the card's been used fraudulently, you can recover the loss. A card also offers greater safety than cash when it comes to carrying it around, so it could be an appropriate alternative for use by children or the more vulnerable (the jury's probably still out on this one though, and many issuers still limit the use of prepaid cards to those over the age of 18).
As you can imagine, the issuing companies love the idea of a prepaid card, since your use of them is practically risk-free. There's no need to check your credit status or history, so prepaid credit cards are issued more or less on demand.
So, is there a catch? Not so much a catch, as the relatively high cost at the moment of using a prepaid credit card. Because they're a relatively novel idea, competition in the market has probably not yet brought the costs as low as they might become. In the meantime, therefore, you should make your choice of card-provider on at least some of the following considerations:
* Will you be charged for simply opening a prepaid credit card account?
* Is there a monthly service charge, and, if so, what exactly do you get for it?
* Is there a charge each time you want to load credit onto the card?
* Will the places that accept your cash to top-up the card also charge for that service?
* Is there a charge for using the card or withdrawing cash on it, including internet purchases?
* Will you be charged for having the card sent to you by express delivery?
* Is there a charge for closing your account?
* Will you be charged for replacing the card, in the event that it is lost or stolen?
* Do you have to pay a fee each time the card is renewed (i.e. upon each expiry date)?
ACE Visa Prepaid Debit Card Review
Several types of prepaid debit cards are available in today's credit market. These offer many of the conveniences of a regular credit card but without some of the risks. One of the options currently available is the ACE Visa Prepaid Debit Card. It is worth your time to investigate this option before applying for it. Here is an overview to get you started.
How it Works
The first step involved with an ACE Visa Prepaid Card is to fill out an online application. There is no application fee for the card, and there is no obligation for the customer either. Once you get the card, you can start loading money onto it.
When you have money loaded into your account, you can begin to use the ACE Debit Card in the same way that you would use a regular credit card. It is accepted at any place that takes Visa. Online shopping, filling up for gas, booking hotel reservations or renting a car are activities that can all be done with this Card.
After you make a purchase, the amount is subtracted from the balance on your card's account. When it hits zero, you will not be able to use the card until you load more money onto it. Loading money on to the card can be done through direct deposit at no extra charge.
Advantages of the ACE Visa Prepaid Debit Card
Some of the features that come with the ACE Card include no overdraft fees or minimum balance requirements. This means that you can carry whatever amount that you want to. And the card is set up so that you cannot spend more than you have in your account. This provides a safety net for you, the user, and helps you avoid heft over the limit fees that come with many credit cards.
There is no charge for direct deposit with this card. If you have your paycheck deposited into the ACE account and then take out money from an ACE Cash Express location, there is no charge for withdrawals. The ACE Prepaid Debit Card also provides protection from unauthorized transactions if your card is lost or stolen.
Disadvantages of ACE Visa Prepaid Debit Card
While the ACE Debit Card is accepted in places that take credit cards, it does not let you borrow money and carry a balance that you pay off each month. Also, if you want to rebuild credit, this card will not automatically cause your score to rise. You can use it to help you become more responsible and financial savvy, but you cannot depend on it for a complete turnaround on your credit record.
How to Decide if the ACE Visa Prepaid Debit Card is for you
If you are considering applying for the ACE Visa Prepaid Debit Card, the first step is to head online. Read through the fine print listed with the card. If it seems like an option that will fit your lifestyle, fill out an online application. You'll receive a reply quickly and will soon be able to start using your new prepaid debit card.
How it Works
The first step involved with an ACE Visa Prepaid Card is to fill out an online application. There is no application fee for the card, and there is no obligation for the customer either. Once you get the card, you can start loading money onto it.
When you have money loaded into your account, you can begin to use the ACE Debit Card in the same way that you would use a regular credit card. It is accepted at any place that takes Visa. Online shopping, filling up for gas, booking hotel reservations or renting a car are activities that can all be done with this Card.
After you make a purchase, the amount is subtracted from the balance on your card's account. When it hits zero, you will not be able to use the card until you load more money onto it. Loading money on to the card can be done through direct deposit at no extra charge.
Advantages of the ACE Visa Prepaid Debit Card
Some of the features that come with the ACE Card include no overdraft fees or minimum balance requirements. This means that you can carry whatever amount that you want to. And the card is set up so that you cannot spend more than you have in your account. This provides a safety net for you, the user, and helps you avoid heft over the limit fees that come with many credit cards.
There is no charge for direct deposit with this card. If you have your paycheck deposited into the ACE account and then take out money from an ACE Cash Express location, there is no charge for withdrawals. The ACE Prepaid Debit Card also provides protection from unauthorized transactions if your card is lost or stolen.
Disadvantages of ACE Visa Prepaid Debit Card
While the ACE Debit Card is accepted in places that take credit cards, it does not let you borrow money and carry a balance that you pay off each month. Also, if you want to rebuild credit, this card will not automatically cause your score to rise. You can use it to help you become more responsible and financial savvy, but you cannot depend on it for a complete turnaround on your credit record.
How to Decide if the ACE Visa Prepaid Debit Card is for you
If you are considering applying for the ACE Visa Prepaid Debit Card, the first step is to head online. Read through the fine print listed with the card. If it seems like an option that will fit your lifestyle, fill out an online application. You'll receive a reply quickly and will soon be able to start using your new prepaid debit card.
Prepaid Credit Cards - Things To Know When Apply For One
Prepaid credit cards are among the most widely used cards around the world. But is there such a thing as a free prepaid credit card? Prepaid cards are never free in fact its name tell it all already - Prepaid, meaning if you have put $500 in your card then you are able to spend and use your card up to $500 only. Yes you might get a free plastic card but almost always there are additional costs you will be charged.
Not all prepaid cards have the same fees and charges. You might get it for free but be careful and check its charges and fees for every transaction that you make. As a sample, some cards provide a monthly or annual fee for using the card and other ones charge like transaction fees every time you use it to make a purchase or withdraw money from it.
Lots of other ones have hidden fees which you should check first before applying for it. If you apply for one try to find a card where all you have to pay is the amount that you are going to put into it and just make sure that there are no hidden fees that may take up some amount out from your deposited amount.
Having a prepaid plastic card is very important in many situations since you don't have to carry any cash anymore but you can pay using your prepaid card. This is very useful when you shop online since you really need a card for you to be able to purchase something over the net. There are lots of these prepaid cards available on the net or you can go down to your local grocery stores like Wal-Mart and you will find it there.
If you don't want to go out, it is possible to get one online but then again you will have to wait for your card to be mailed to you which can take sometimes over a week. If you are in a hurry to have a prepaid credit card then it is much better if you go down to your local store and get one there and you are able to use it immediately.
Also these cards are very handy to use when you are traveling, you can book your hotel using your card or any other things where cash is not accepted. You can also use it for cash purchases. It is very convenient for you since you only carry your card with you and you don't even have to think of paying interest rates for you are just spending your own money.
So if you do not have a plastic card then a prepaid card is your best alternative. It functions like any credit card only you have to deposit money on it so you can use it. You may now purchase online and book your hotel without any problem. Booking a hotel needs a card because they don't accept cash for a reservation. You will get a lots of benefits from a prepaid card if you don't have the traditional credit card. So get started now to find the right prepaid credit card for you.
Not all prepaid cards have the same fees and charges. You might get it for free but be careful and check its charges and fees for every transaction that you make. As a sample, some cards provide a monthly or annual fee for using the card and other ones charge like transaction fees every time you use it to make a purchase or withdraw money from it.
Lots of other ones have hidden fees which you should check first before applying for it. If you apply for one try to find a card where all you have to pay is the amount that you are going to put into it and just make sure that there are no hidden fees that may take up some amount out from your deposited amount.
Having a prepaid plastic card is very important in many situations since you don't have to carry any cash anymore but you can pay using your prepaid card. This is very useful when you shop online since you really need a card for you to be able to purchase something over the net. There are lots of these prepaid cards available on the net or you can go down to your local grocery stores like Wal-Mart and you will find it there.
If you don't want to go out, it is possible to get one online but then again you will have to wait for your card to be mailed to you which can take sometimes over a week. If you are in a hurry to have a prepaid credit card then it is much better if you go down to your local store and get one there and you are able to use it immediately.
Also these cards are very handy to use when you are traveling, you can book your hotel using your card or any other things where cash is not accepted. You can also use it for cash purchases. It is very convenient for you since you only carry your card with you and you don't even have to think of paying interest rates for you are just spending your own money.
So if you do not have a plastic card then a prepaid card is your best alternative. It functions like any credit card only you have to deposit money on it so you can use it. You may now purchase online and book your hotel without any problem. Booking a hotel needs a card because they don't accept cash for a reservation. You will get a lots of benefits from a prepaid card if you don't have the traditional credit card. So get started now to find the right prepaid credit card for you.
Vision Premier Prepaid Visa Card
The Vision Premier Prepaid Visa Card is similar to a normal credit card, except that it does not come with any of the credit provisions by the card issuer. The card limit is a pre-determined amount the you can pre-load or recharge by depositing money at a WesternUnion, MoneyGram and more than 100,000 other retail locations.
The Vision Premier Prepaid Visa Card can be used as a standalone prepaid card, a non-reloadable gift card or as a prepaid travel card. Small business owners can even give them to employees or contractors as a payroll card, or to handle any petty-cash transactions.
Some of the basic features of Vision Premier Prepaid Visa Card includes the fact that it carries a brand name, in this case, Visa. It's an ideal card for anyone if you happen to have a bad credit history. You can withdraw cash from any ATM machine. And perhaps one of the biggest benefits, It has a 100% approval rating as it does not require a credit check.
In many cases a prepaid card can be safer and more convenient to carry than cash. If you're traveling abroad, the Vision Prepaid Visa Card is an ideal substitute for traveler's checks while traveling abroad. The card is also good for if your child is a student, because it offers you the ability to monitor spending and the spending limit is fixed. This will helps you budget ahead of time, for any expenses.
Applying for a prepaid credit card is similar to applying for a normal credit card. However, before assigning a credit card to a person, his/her credit-worthiness is checked thoroughly. This is done to prevent default on the credit. A prepaid debit card does not require such checking, since the issuer does not extend any credit to the cardholder. Therefore, applying for and acquiring a prepaid card is easier and faster.
The Vision Premier Prepaid Visa Card can be used as a standalone prepaid card, a non-reloadable gift card or as a prepaid travel card. Small business owners can even give them to employees or contractors as a payroll card, or to handle any petty-cash transactions.
Some of the basic features of Vision Premier Prepaid Visa Card includes the fact that it carries a brand name, in this case, Visa. It's an ideal card for anyone if you happen to have a bad credit history. You can withdraw cash from any ATM machine. And perhaps one of the biggest benefits, It has a 100% approval rating as it does not require a credit check.
In many cases a prepaid card can be safer and more convenient to carry than cash. If you're traveling abroad, the Vision Prepaid Visa Card is an ideal substitute for traveler's checks while traveling abroad. The card is also good for if your child is a student, because it offers you the ability to monitor spending and the spending limit is fixed. This will helps you budget ahead of time, for any expenses.
Applying for a prepaid credit card is similar to applying for a normal credit card. However, before assigning a credit card to a person, his/her credit-worthiness is checked thoroughly. This is done to prevent default on the credit. A prepaid debit card does not require such checking, since the issuer does not extend any credit to the cardholder. Therefore, applying for and acquiring a prepaid card is easier and faster.
Do Prepaid Cards Report to Credit Bureaus?
Are you looking for a prepaid card that reports to a credit bureau? The short answer is that most prepid cards do not help you improve your credit. That's because prepaid cards are not credit cards, and thus they do not extend credit to you. No credit, no credit bureau tie in.
However, there are are some cards that offer a credit reporting feature. Called the iAdvance Line of Credit by MetaBank, this is essentially a way to take out loans on a prepaid card account that when paid back get reported to one or more of the three major credit bureaus: Experian, TransUnion, or Equifax.
What Is a Prepaid Card?
First know how prepaid cards work. They are stand alone cards that look and act like a checking account debit card. They carry the Visa or MasterCard logo (typically) and run on the same debit card networks. They have an embossed 16-digit number on the front. This is your card's account. They have a magnetic strip on the back for card swipe machines to read your card account number. And they have a security code and signature line on the back as well. Unlike traditional debit cards (also known as check cards) prepaid cards are debit cards that are not attached to a checking or savings account.
You simply apply for a prepaid card from any number of prepaid card companies--such as MiCash MasterCard. There are no credit checks. You just have to verify your identity by providing your social security number and birth date (as required under the U.S. Patriot act to avoid terrorists or other criminals from obtaining a card). To use the card, you must "load" your card with money. You can do this through direct deposit, or through reloading networks. (See which networks apply to your prepaid card).
After you do that, you can use the card for purchases, and for each purchase, the purchase amount is deducted from your card's balance. When you reach zero dollars, you either need to put more money onto your card or it will become inactive. With prepaid cards, you'll pay either a monthly fee or a per-transaction fee (usually a dollar a transaction). So while these cards aren't free, for the unbanked (people who can't get a credit card or a checking account) they are an excellent alternative.
More About iAdvance
Here's how iAdvance works. You go to the iadvance website and sign up using your card account. You have to have direct deposit set upon your card as well. With the MiCash Card, you simply download a direct deposit form and, fill it out with your card's account number, and hand it in to your employer's payroll department.
Once you have set up direct deposit, you contact iAdvance online or by phone and take out a loan against your card balance (up to 50% of your balance). iAdvance does not recommend treating this program like a payday loan, and limits the number of iAdvances you can take out in a given calendar year.
Rather, it is meant for you to take out small loans--even as small as $20, which will then be automatically paid back the next time you have a direct deposit. This loan transaction and the fact that you paid it back on time (which happened automatically provided you didn't cancel direct deposit in the interim) is reported to one or more of the three major credit bureaus.
Over time, you will build up a history through iAdvance of paying loans back on time. This should help with your credit score, althought iAdvance makes no claims that it will.
Not a Credit Card
So, even though you don't have a credit card, this is a good method for generating some "credit" that will wind up in your credit report. Another method is to pay bills, although bear in mind that most bill pay programs do not report to the major credit bureaus and hence, their value is minimal.
However, there are are some cards that offer a credit reporting feature. Called the iAdvance Line of Credit by MetaBank, this is essentially a way to take out loans on a prepaid card account that when paid back get reported to one or more of the three major credit bureaus: Experian, TransUnion, or Equifax.
What Is a Prepaid Card?
First know how prepaid cards work. They are stand alone cards that look and act like a checking account debit card. They carry the Visa or MasterCard logo (typically) and run on the same debit card networks. They have an embossed 16-digit number on the front. This is your card's account. They have a magnetic strip on the back for card swipe machines to read your card account number. And they have a security code and signature line on the back as well. Unlike traditional debit cards (also known as check cards) prepaid cards are debit cards that are not attached to a checking or savings account.
You simply apply for a prepaid card from any number of prepaid card companies--such as MiCash MasterCard. There are no credit checks. You just have to verify your identity by providing your social security number and birth date (as required under the U.S. Patriot act to avoid terrorists or other criminals from obtaining a card). To use the card, you must "load" your card with money. You can do this through direct deposit, or through reloading networks. (See which networks apply to your prepaid card).
After you do that, you can use the card for purchases, and for each purchase, the purchase amount is deducted from your card's balance. When you reach zero dollars, you either need to put more money onto your card or it will become inactive. With prepaid cards, you'll pay either a monthly fee or a per-transaction fee (usually a dollar a transaction). So while these cards aren't free, for the unbanked (people who can't get a credit card or a checking account) they are an excellent alternative.
More About iAdvance
Here's how iAdvance works. You go to the iadvance website and sign up using your card account. You have to have direct deposit set upon your card as well. With the MiCash Card, you simply download a direct deposit form and, fill it out with your card's account number, and hand it in to your employer's payroll department.
Once you have set up direct deposit, you contact iAdvance online or by phone and take out a loan against your card balance (up to 50% of your balance). iAdvance does not recommend treating this program like a payday loan, and limits the number of iAdvances you can take out in a given calendar year.
Rather, it is meant for you to take out small loans--even as small as $20, which will then be automatically paid back the next time you have a direct deposit. This loan transaction and the fact that you paid it back on time (which happened automatically provided you didn't cancel direct deposit in the interim) is reported to one or more of the three major credit bureaus.
Over time, you will build up a history through iAdvance of paying loans back on time. This should help with your credit score, althought iAdvance makes no claims that it will.
Not a Credit Card
So, even though you don't have a credit card, this is a good method for generating some "credit" that will wind up in your credit report. Another method is to pay bills, although bear in mind that most bill pay programs do not report to the major credit bureaus and hence, their value is minimal.
What is a Prepaid Debit Card?
If you are looking for a prepaid debit card, you need to get the one that's suitable for you.
There are different types of prepaid card and different prepaid card providers may have different transaction fees and charges.
Some may also be able to be more widely used than others due to the logo they carry.
You may not be able to use some cards abroad to withdraw foreign currency for example.
So if this is something that you're looking for in a prepaid card, then you may need to opt for one bearing a branding (like MasterCard or Visa) which is typically widely accepted abroad.
Prepaid cards are typically loaded with cash via PayPoint outlets.
There are others though which can be linked to an online account, which could also give you the option of managing your transactions online.
Budgeting
If you are trying to stick to a budget, you may find that a traditional credit card may offer too much in the way of temptation when it comes to spending. You may find yourself using your credit card in a situation where you would not even consider taking out a loan but that really is what you're doing.
Even with a traditional debit card linked to a bank account, there may be the option of spending more than you should.
At the same time though, it has to be acknowledged that trying to do without a card of some type in today's modern life can be almost impossible.
This is where a prepaid debit card could be invaluable. This is because:
l you are in control of the amount of money loaded onto the card;
l there is no possibility of spending more than is on the card;
l so you have the flexibility of card use;
l but without the risk of running up debt.
Safer more flexible option
There are other areas where a prepaid card like this could be useful including;
l as a more secure alternative to cash for your holiday spending money;
l perhaps you could give your children the flexibility of using a card on shopping or school trips while at the same time keeping control of spending limits;
l out of hours to pay for things like petrol etc;
l for internet or telephone purchases.
There are different types of prepaid card and different prepaid card providers may have different transaction fees and charges.
Some may also be able to be more widely used than others due to the logo they carry.
You may not be able to use some cards abroad to withdraw foreign currency for example.
So if this is something that you're looking for in a prepaid card, then you may need to opt for one bearing a branding (like MasterCard or Visa) which is typically widely accepted abroad.
Prepaid cards are typically loaded with cash via PayPoint outlets.
There are others though which can be linked to an online account, which could also give you the option of managing your transactions online.
Budgeting
If you are trying to stick to a budget, you may find that a traditional credit card may offer too much in the way of temptation when it comes to spending. You may find yourself using your credit card in a situation where you would not even consider taking out a loan but that really is what you're doing.
Even with a traditional debit card linked to a bank account, there may be the option of spending more than you should.
At the same time though, it has to be acknowledged that trying to do without a card of some type in today's modern life can be almost impossible.
This is where a prepaid debit card could be invaluable. This is because:
l you are in control of the amount of money loaded onto the card;
l there is no possibility of spending more than is on the card;
l so you have the flexibility of card use;
l but without the risk of running up debt.
Safer more flexible option
There are other areas where a prepaid card like this could be useful including;
l as a more secure alternative to cash for your holiday spending money;
l perhaps you could give your children the flexibility of using a card on shopping or school trips while at the same time keeping control of spending limits;
l out of hours to pay for things like petrol etc;
l for internet or telephone purchases.
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