Getting a credit card prepaid is often the only option if you’ve been turned down for a regular credit card. Because nowadays it’s almost a necessity to have a major credit card if you plan to stay at a hotel, rent a car or book a flight. Even renting a video.

What does it mean when a credit card is prepaid?

Basically it’s like opening a checking account. You deposit the money into an account and then you have access to that amount to spend. Unlike with the checking account you can’t overdraw a prepaid card, also referred to as a debit card. Once you’ve spent all of your deposit, the card will no longer work.

As long as you have money in the account, your prepaid credit card acts just a like a regular credit card. You can use it anywhere.

Adding money to the card account is easy. Anything from direct deposit of your paycheck to tax refunds to social security to child support or other payments.

What are the advantages of a prepaid credit card?

First off, you don’t need to pass a credit check. They call that guaranteed acceptance, which is a big deal if you’ve gone through some hard times that lowered your credit rating.

You don’t pay any interest fees or late fees. That can be a big deal because regular cards can have high interest rates. You can also never be overdrawn.

You’ll never get any deeper in debt using one because you’re using your own money, not borrowing from the credit card company. There’s no credit card bill with a balance due.

Carrying a prepaid credit card is also safer than if you were carrying cash. The card is good anywhere in the world because Visa and MasterCard are accepted everywhere. Getting cash is as easy as visiting the nearest ATM machine.

No credit limit – you can deposit as much as you want so you set your own limit.

What are the disadvantages of a prepaid credit card?

They’re not all that cheap to maintain. First you have a setup fee, which runs about $10. Then there’s another fee whenever you want to add more money to your account.

If the money’s gone and it’s still a few days until payday, a credit card prepaid won’t help. You can’t use it. This one’s kinda an advantage because you can’t rack up expenses, but then you can’t get yourself out of a bind in an emergency either.

This type of account won’t help rebuild your credit score. You’d need something called a secured credit card for that.

Where can you get a credit card prepaid?

At a bank or retail location near you. If you visit a local bank, just ask for a reloadable Visa or MasterCard. Then load it with the cash amount you want and you’re ready to make purchases anywhere the card is accepted including over the phone, online and in supermarkets, pharmacies, clothing stores and drug stores.