Are Prepaid Credit Cards Right For You?

If you aren’t able to qualify for regular credit cards, prepaid credit cards might be an option worth checking into. They work very similar to debit cards because the money you spend is not borrowed but your own.

To get started you’ll need to open a prepaid card account and deposit money into it. Then you can basically use this card like any other credit card. The great thing is you can’t go into debt with these cards. The money you spend is already there so you won’t have to worry about mounting interest charges.

Like a debit card, you will need to keep track of spending to ensure you always have money in the account. Some companies offer free applications to your wireless device that allow you to check balances, see transactions and transfer funds to your card from a linked bank account. This makes it extremely easy to manage your account.

It’s important to research several different prepaid cards before choosing one. There’s usually a fee to open the prepaid card account but they vary. And most will charge a fee each time you deposit money into your account. But again some charge more than others so you could potentially save a lot. Some even report to the credit bureaus so this can help rebuild your credit as well.

Even with the fees involved, these cards can be worth it if you’ve been unable to qualify for other cards due to bad credit or no credit. They allow you the freedom that credit cards offer without the temptation or ability to overspend. By helping you spend more responsibly they can also help get you back on track financially.

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