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There are many reasons why a free prepaid credit card may be the card for you. Perhaps you would like to teach your college kid good fiscal responsibility. Maybe you are having trouble obtaining a normal credit card due to poor credit score and would like to work on improving it.

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A prepaid credit card has its fair share of advantages and disadvantages. In fact, they function more like debit cards, except there is no savings or checking account tied to the card. With a prepaid credit card, your credit limit is determined by the amount you pre-pay to the credit card company. Once the balance has been depleted, you will then be required to purchase more credit in order to continue using the card.

Prepaid cards are electronic cards which allow card holders to access funds deposited to an account. A prepaid card can be used to withdraw money or pay for goods and services. Unlike a credit card, which extends a line of credit, prepaid cards are more similar to debit cards. Prepaid card holders can only spend the money they load on the card. Since no credit is extended to prepaid card holders, interest and overdraft fees are avoided.

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One of the greatest advantages of prepaid cards is the low application requirement, where a good credit score is unnecessary. In fact, you don't even need to have a credit score, or even have an income to qualify. You just need to be at least 18 years of age.

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Also, most prepaid credit cards do not impose APRs on the amount you have deposited with the credit card company. This makes sense, since you're not actually obtaining credit from them. Another feature of prepaid credit cards is their ability to let you deposit your check directly onto the card balance. Not only will this save you trips to the bank, it's also a great convenience if you're the type who charges everything to the credit card.

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While prepaid credit cards are generally a good bet, they are not without their downsides. Like regular credit cards, they may have fees attached to them such as a monthly maintenance fees, transaction fees and ATM fees. These are costs of using your prepaid credit card, and can be significant if you don't choose the right card.

Cash can also be used to load a prepaid card. Money transferring services, such as MoneyGram or Western Union, can be used to load cash onto a prepaid card. Why Use Prepaid Credit Cards There are many benefits of using a prepaid card. For instance, more businesses are requiring credit or debit cards when dealing with their company. Most motels, hotels, car rentals, and airlines require a major credit card to be used when making a reservation. Also, most online shopping is done using a credit or debit card. With a prepaid card, those who normally deal in cash can use their card to secure reservations at various businesses, pay bills electronically and shop online.

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In conclusion, prepaid cards function truly well for those who do not wish to spend more than what they own, but at the same time require the convenience of a credit card. This way, you won't get carried away with your expenses or find yourself drowning in debt.

For some, prepaid cards can be used as a way to discipline spending habits. Since prepaid cards only use deposited funds, excessive shoppers may see them as a healthier alternative to credit cards. By using a prepaid card instead of a credit card, items are not bought on credit, eliminating the headaches of high interest rates.

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Adam Goldman recommends Find Credit Cards to find a free prepaid card.

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