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Prepaid Credit Cards
Updated: April 10th, 2012 by Timothy James -- We will cover two important areas here. Firstly, how to choose the most suitable Prepaid Credit Card and whether it will be beneficial for your personal circumstances. Secondly, what the best card offers are for the current week. Read the guide then compare the cards! Alternatively, if you want search for other card types, please go here.
Read The Guide...
This guide will give you important information you should know before applying; such as:
How prepaid credit cards work.
When, how and who should use them.
Whether to ditch your checking card..
This week's top prepaid card offers.
Compare The Cards...
Looking for the best offers for prepaid credit cards?
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Recommended:
Most popular credit card in this category.
Prepaid Credit Cards - What are they & how do they work?
Prepaid cards are different from normal credit cards in that you have to use your own money to finance them. You literally 'load' credit on to the card before being able to use it. Once the credit's there, you can then use the card as you would with a standard credit card - and earn points or cash back along the way.
There are two main methods by which you can load a prepaid card. The first is from a bank account and the second is via a direct payment system - i.e. you arrange to have a set amount of credit loaded onto your card each month, sometimes direct from your employment wages. Once you've loaded money onto the card, you spend until it runs out, at which point you simply reload and start again.
A solution for students and people with credit issues?
There are a number of people who would benefit from having a card of this type...
Firstly, anyone with a less than perfect credit history who may be having trouble getting a credit card or even a bank account (note: you don't have to have a bank account to get approved for a prepaid card).
In addition, prepaid credit cards can be a good solution for teenagers/students as their parents can load the card with money to provide them with a monthly allowance or as a source of emergency cash. It keeps parents in control whilst giving their kids a taste of freedom and a lesson in money management.
One thing that is important to remember is that prepaid cards do not offer you credit and currently do not help to improve your credit score.
Should you replace your checking card with a prepaid card?
Like credit cards, some prepaid cards offer a rewards scheme which means the more you spend the more redeemable points or cash back you can earn.
This alone
could
make spending your money via a prepaid card considerably more beneficial than doing so on a standard checking account debit card, especially if you personal spending is relatively high. If this is the case, then it may be worth getting a prepaid card, funding it using money from a checking account, spending the money on the prepaid card and subsequently cashing in on the offered rewards.
However, remember two things -- First, whether you derive any benefit from doing this is very dependant on your spending habits and you'll have to weigh up the cost of card fees against potential rewards. If the fees out weigh the rewards, then spending on a checking card may be a better option.
Prepaid credit cards and debit cards rarely carry an annual fee, however, they usually have monthly fees as well as activation fees. So for example, you might have to pay around $10 to activate your prepaid credit card and then anywhere between $1 and $10 each month to use it. These fees vary greatly between cards so be sure to take note of this when choosing a card.
The best Prepaid Card offers for the current week...
Whilst other finance websites usually list vast numbers of credit card offers on a single page, in our view, all that does is create confusion (and a lot of research work) for you, the consumer. We've done all that work for you.
The top cards in our opinion are each marked with 5 stars. Remember, credit card companies change their offers and rates all the time and the below information is correct at the time of writing. However, be sure to double check the terms of the offer on the provider's website before completing an application.
As an official sponsor of the National Breast Cancer Foundation, purchases from the ACE Elite Card have contributed to over $2 million towards breast cancer awareness and detection.
Free Direct Deposit - paychecks are available up to two days faster*
Direct Depositing $500 in one calendar month qualifies you for a $10 Purchase Cushion & our lowest fee plan*
No credit check, No application fee, No obligation*
Secure: Card funds are FDIC insured, backed by Visa® Zero Liability*
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