Prepaid credit cards are useful toolsthat are often utilized to improve one’s credit. When someone isnot able to make their payments on time, or has other financialtrouble, their credit can be hit pretty hard. But, a prepaid creditcard can help them get back in good standing with lenders. It worksessentially the same as a debit card, and only allows you to spendmoney that you have already got. This will help you avoid many of thepitfalls that have given credit cards notoriety for being financiallyruining.
To open a prepaid credit card, you willhave to deposit a small fee. The fee is usually between 5 and 10dollars. After that, you can deposit any amount of money through yourbank account. This money is added to the balance of the card. Afterit has a balance, you can use it just like a normal credit card, todo anything that you would regularly do. Therefore you are given theconvenience of a credit card without the temptation to spend morethan you actually have.
Your activity on a prepaid credit cardis reported to the credit bureau, so over time you can graduallyregain your credit to decent standing. With poor credit, if you tryto get a regular credit card, you won’t be able to find anythingwith decent terms. You’ll have to deal with high APR rates andinflexible deadlines. But if you can improve your credit with aprepaid credit card, you’ll be able to get a regular card withterms that you can agree to.
So if you suffer from poor credit, youshould look into getting a prepaid credit card. Instead of applyingfor one with horrible terms and rates
, you can use one that will keepyou out of debt and start improving your overall credit.
