Prepaid debit cards are also called reloadable credit cards. You can only spend money that is in your account, and will not be able to go into debt. Many banking institutions provide these, along with major credit card companies, and many celebrities endorse these offers.
Bank Prepaid Cards
If you get a prepaid Visa or MasterCard from a bank. It is going to work just like a checking account. When you use your prepaid card, it is exactly like writing a check, and those funds will be deducted from your balance.
What If You’re In ChexSystems?
Our heart goes out to you, if you’re one of these unfortunate individuals. You don’t have to keep looking for banks without ChexSystems, you can still get a prepaid reloadable credit card. The majority of prepaid credit cards have been created for individuals that do not have a checking account. This will, however, require you to pay most likely, a low monthly fee.
In addition, rather than money being deducted from your account when you make purchases. You will have to buy a reload pack to deposit cash on your account. You should be able to sign up for a few prepaid direct deposit cards. This direct deposit option should be free, and that can save you a bundle of money, if you’re currently paying expensive check-cashing fees.
Will It Build Credit?
No. Unfortunately, because you are not borrowing any money and instead you must first deposit money into your prepaid debit card account, it will not help with repairing credit. You may see a credit monitoring feature offered, but your account information will not be reported to the three major credit bureaus.
If you’re looking for a credit building credit card, we suggest researching secured credit cards. These will report your account information monthly to all three credit bureaus.
What About The Fees?
Each prepaid reloadable credit card is different. However, you shouldn’t be required to pay an activation fee. We have seen some prepaid companies charge you an activation fee, when you first load money on your account. Please, be careful. You can expect to pay a monthly maintenance fee of around $5.
The American Express Prepaid Card is an excellent choice with some very low fees, along with the Capital One Prepaid MasterCard it offers a low $4.95 monthly fee. Do your homework and check the full fee schedule before you apply. Some of these companies also offer different fee plans depending on your specific needs.
Your card needs to be issued as a major Visa or MasterCard. This way you will be able to use your card for purchases online and over the phone. An added benefit to many prepaid debit credit cards is that they will provide you with an online bill payment system for free. This gives you a way to send payments for your bills, and even to pay individuals. You have many options when it comes to prepaid debit cards.
This market has absolutely exploded and one is an is one of the fastest growing segments of the credit industry. If you’re sick and tired of living with a bad credit score take action and get a free credit consultation with a certified FICO professional by calling toll-free 1-877-418-7596. And for more tips, techniques, and strategies to help with with bad credit with Dan Willis, sign up for our free newsletter and join our congregation.
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