Prepaid Credit Cards - Pros and Cons

What do you do if you need a credit card but can't get a lender to grant you access to this extremely convenient little piece of plastic? Until recently your hands were tied if you found yourself in this situation. Of course you could sometimes get a debit card with your bank account but these were never as widely accepted and sometimes carried high expenses if you wanted to use them on your travels.

Thankfully we now have a solution and its one that a surprising number of people have never heard of. The Prepaid credit card is works in much the same way as a regular credit card except that you are not actually making use of a credit facility when you use it. That's because you fill the card up with cash before you spend it. If you haven't top up your card with the required cash then you can't make the purchase.

These differences give both advantages and disadvantages to the end user. If you have problems controlling your finances and often get into trouble with regular credit then this might be the solution you have been looking for. Because you can only spend the money you have put on the card you can be tempted overspend when out on a shopping spree. The negative is that you may find yourself running out of cash in situations where you would normally have no troubles with a regular credit card. Or course, all cards have their limits even when its on credit so you just have to learn to forward plan your finances a little.

With the convenience afforded by prepaid credit cards and the added safety in comparison to carrying around large amounts of cash its easy to see why they have become so popular. If you are finding it hard to get a regular credit card you may want to give them a try.

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