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Pre-Paid Credit Cards
What are Pre-Paid Credit Cards?
A pre-paid credit card provides people with the convenience of a conventional credit card, so you can spend or withdraw money wherever you see the relevant sign (Visa or MasterCard), without actually using credit.
For many holders of pre paid credit cards the main attraction is that the approval process is not as stringent as the process for approving applications for conventional credit cards. Employment and credit history checks are not carried out - they are not necessary because not credit is given.
This means people with a non-existent or bad credit history, or an unemployed or low income person, can still experience the benefits of carrying a credit card with the Visa or MasterCard symbol.
Who might use a pre-paid credit card?
Those not wishing to own a conventional credit card . . .
A pre-paid credit card can be perfect for those wanting to avoid the potential of getting in to debt and owing more money than they can afford to pay back. Pre-paid credit cards also carry less risk as they can only be used up to the pre-paid balance that the owner has added, not up to a pre-defined credit limit, which can often be more than the bearer can afford to pay back.
Students
Students, who may be distanced from their parents and moving towards financial independence themselves, can certainly benefit from pre-paid credit cards.
Increasingly people use credit cards for security reasons - it's a great way to avoid carrying cash or visiting ATMs before making purchases.
Students may also wish to use the card to make purchases online, such as books, travel tickets, etc.
Parents might also prefer the pre-paid credit card as a method of giving their child some financial freedom with the convenience of a credit card. Parents can take charge of administering the card providing them a way of monitoring how their money is being spent. It can also be an excellent teaching tool that parents can use to teach their children about budgeting.
Travelers
Travelers require access ATMs and the ability to purchase products and services whilst overseas, a pre-paid credit card can be an excellent way to do this. Whether on a short break or taking a year out, access to your money via the Visa or MasterCard systems can be crucial.
Pre-paid credit cards give the bearer the convenience of a conventional credit card for travelers and holiday makers without the downsides of a conventional credit card.
Internet users and online gamers
A pre-paid credit card can be great for internet users and online gamers.
Online businesses and gaming sites often accept visa and MasterCard as a method of payment.
For online shopping and internet gaming, a pre-paid credit card can therefore be essential
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