Prepaid Credit Cards - a Misnomer (cont.)
Contributed by Deb Powers
Why would you use a prepaid credit card if you don't get any credit?
A prepaid credit card is a good choice if you want to be able to make purchases online without taking the risk of giving unknown merchants your credit card information and access to your credit line. Be aware though, that many companies that require monthly payments will not accept a prepaid card for purchase, as there is no guarantee that the funds will be available at the next billing cycle. Still, if you want a safe way to purchase online, a prepaid credit card can provide that.
A prepaid credit card also is an excellent way to provide a weekly or monthly spending 'allowance' to a child at college. The student has the convenience of being able to 'charge' things on the card, and you can easily control the amount that's spent by the amount of the deposits made to the account.
One of the least compelling reasons to use a prepaid credit card is to 'repair your credit'. If that's part of your reason for purchasing one, make certain that you choose a company that reports credit card activity to credit reporting agencies, and then make regular deposits to your card to establish a pattern of spending and saving.
