Prepaid credit cards
Want to establish credit for the first time, or re-establish credit
after bankruptcy? Prepaid credit cards may be the answer for you. They
may also be the answer for students and their parents, and may be the
only answer for people living in some developing countries.
In today's cashless society, it is difficult to get along without a
credit card. It's almost essential if you want to buy anything online,
although the cumbersome route of sending a check is possible in many
70 million must pay cash
But some 70 million Americans don't have checking or savings accounts,
credit cards or debit cards. If they receive a check, it costs them up
to 20% to get it cashed. Paying bills can be a nightmare, trekking to
various offices and paying them in person. Hotels, car rentals and the
Internet are mostly off limits. The American Dream relies on credit
Prepaid credit cards are also a way to control spending to amounts you
can afford. You can't overspend, even if you want to. Other advantages
include no credit checks and no interest charges. They are a convenient
way the transfer money to the cardholder at no cost, handy, for example,
for international students. Prepaid credit cards are easy to get online,
and can be used almost anywhere where MasterCard or Visa cards are
A prepaid credit card is a useful learning tool for children. Pay the
initial setup fee (usually from $5-50), and let them pay the smaller
renewal fee when the initial period expires. Teach them that if they let
it lapse they have to start all over again with a much larger fee. A
lesson in financially responsibility.
College credit used to be something you earned by attending class.
Today, it often refers to how much a student owes. Seventy-eight percent
of college students carry at least one credit card. Average debt is
$2,748, according to one source. A prepaid credit card is a great way to
start teaching kids that money doesn't grow on credit cards. It allows
students to carry money safely, to have it available when needed, and
parents to have control over teen spending.
Fees are a small price to pay for the convenience of a credit card and not having to line up to pay bills.
- The Vaya MasterCard, as with most prepaid credit cards, requires no credit check or bank
account. Direct deposits are free. There is an application fee of
$49.00, and a monthly fee of $5.95.
- Wired Plastic Prepaid Visa
offers one point for every $1 spent. Points can be redeemed for prepaid
wireless, Internet or calling card airtime. Cash can be added through
Western Union offices. The activation fee is $9.95, and the monthly fee
is $3.95. There are fees for various types of transactions.
- Liberty Union Prepaid Visa Debit card has no activation fee, a monthly
maintenance fee of $4.95, plus usage fees, which include $10 a month on