What are prepaid credit cards?

January 6, 2008

Prepaid MasterCard cards and/or prepaid Visa cards look exactly like a regular credit card. Neither you and your friends, nor the merchant who accepts MasterCard and Visa will be able to identify it as a prepaid credit card.

You obtain these prepaid credit cards by “pre-loading” them, which means you deposit cash into your account up-front, similar to a pre-paid calling card. Then you use your prepaid MasterCard or Visa anywhere these cards are accepted.

Prepaid Credit Cards are more practical than cash for many with previous credit problems since you pay for your purchases before you even buy anything. This helps you plan your purchases better and avoid impulse buying. Prepaid credit cards offer other advantages:

They are easy to get since they do not require stringent credit check or income verification.
They can be purchased online and at many retail stores.
They have very short credit card application.
They do not have any interest charges since you are not borrowing money.
They cannot lead into credit problems due to inability to pay borrowed funds.