Pre Paid Credit Cards to Improve Your Credit? Do Your Research (cont.)
Contributed by Michelleg
Annual Fees for Pre Paid Credit Cards
Annual fees are charged to you every year for owning your card and cost on average $60.00 per year. Many pre paid credit card companies claim that there are no annual fees associated with the card. Watch out for these claims because in place of the fees you will more than likely be charged what is called a "monthly maintenance fee" which costs from $5.00 to $10.00 and more per month. Some companies may even offer to have this fee waived if you would prefer to pay $1.00 - $2.00 per transaction fee.
Annual Percentage Rate for Pre Paid Credit Cards
In addition to fees it is important consider the cost of Purchase APR. The APR is the annual percentage rate you are being charged for purchases which are not paid before the grace period. It can be as low as 7.2% and as high as 23.9%, sometimes the rate will be based on your "creditworthiness". The APR for cash advances is sometimes much higher then the Purchase APR, although sometimes there is a designated fee per cash advance.
On average all the fees combined will cost you about $200.00 the first year not including APR and on average $60.00 every year you own it. Shop around though if you can afford it, pre paid credit cards are a good way for you to improve your credit report score quickly. There are pre paid credit cards that may fit you better than others so it pays to do your research before choosing the pre paid credit card that's right for you.
