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If you have a history of bad credit and are unable to obtain a mainstream credit card, then prepaid credit cards may be just the answer you are looking for.

Credit Pacific Service Union First of all, although prepaid credit cards are accepted at any retail outlet where the credit card logo is displayed, strictly speaking they are not a 'credit' card, as the issuer provides no credit facility to you. Rather, your spending limit is determined by how much money you have on the credit card at any given time.

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.

Credit First Service Union Once the amount on the card has been spent, the cardholder can either buy a new prepaid credit card or elect to transfer money on to the existing card, depending on the card program.

So as a student, how would a prepaid credit card work for you A prepaid credit card works like a prepay mobile phone. You pay credit in advance of using it. Ita s a great way get the benefits of a credit card, without running up a debt. However, the fees can be expensive, so think carefully about whether ita s worth it. It can be used at shops and online, like a normal credit card.

Card Credit Mobile Service Although prepaid credit cards sound very like debit credit cards, the two should not be confused. In the case of debit cards, any purchase for goods or services you make will automatically be charged to you bank account - for which the debit credit card has been issued. However, purchases for goods or services made on prepaid cards goes off the balance already on the 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.

Card Credit Discover Service Because of the prepaid nature of these cards, they have several benefits, such as:

• no interest is charged
  
• they give people with a bad credit history the option to use a credit card
  
• the 'credit' line is variable depending on the amount on the balance of the card

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.

Credit Public Service Union That said, you still need to review the terms and conditions of the application form carefully as prepaid credit cards can have

• a monthly membership fee
  
• an application fee
  
• a purchase fee
  
• a monthly transaction limit fee, i.e. if you spend over a fixed amount each month you are charged a fee for any additional transactions
  
• a fee if you use the card to make ATM withdrawals

Impartial guide about credit card types available in the UK. Ensure you choose the right credit card type for you and save money with uSwitch.com

Card Credit Processing Service Nonetheless, the card is a superb option if you either cannot obtain a regular credit card or are tired of all the fees and interest charges that are normally associated with standard credit card.

Center Credit Service Union Joseph Kenny is the webmaster of the UK credit card comparison site http://www.creditcards121.com/, where you can find a selection of credit card advice. For US visitors there is also the comparison site http://www.credit-cards-info.com/ for all US interest free offers.

Card Credit Service Wireless Joseph Kenny is the webmaster of the loan information site http://www.ukpersonalloanstore.co.uk. At the Personal Loan Store you can find some of the latest personal loans explained in detail.

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