Observers in the lending industry have estimated that there may be at the very least 50 million Americans that are unable to qualify for credit. These consumers are usually young, often members of the minority groups and unbanked…and they are faced with the long-standing dilemma of credit: just how can I build my credit record if no body gives me any credit at all?
Among the answers made available from bank card companies is a number of prepaid bank cards, made for use by specific segments in the market. The prepaid bank cards are meant for that significant portion of the people that cannot meet the qualification criteria for regular bank cards, or who qualified before but have since lost their credit as a result of repeated defaults and other reasons.
Features of Prepaid Credit Cards For individuals who do not have enough credit history or have had it blemished, prepaid bank cards are a powerful way to construct or slowly rebuild credit. That will not happen immediately, but it is something to work on over time. The banks that issue prepaid bank cards will also be prepared to extend normal credit the minute you are able to reveal that you’ve turn into a worthy credit risk.
For the minute, you may have to make do with prepaid credit cards. You should use prepaid bank cards as you’d some other regular bank card to buy airline tickets, reserve hotel rooms, or order items online.
Prepaid Credit Card for Students There is a special prepaid Visa bank card for students, that offers plenty of convenience not merely for the students but also because of their parents. These reloadable prepaid bank cards offer parents several options on how best to reload. Parents will add money to reloadable prepaid bank cards by depositing money, by arranging an automatic transfer of funds from their account (a deposit account or their very own bank card account), or by online transfer. Utilizing the prepaid Visa bank card is not any different from giving the regular allowance to the youngster, only they do this by electronic means and there is no more cash that changes hands.
The big benefit of the prepaid Visa bank card is that the student is restricted to spend only as much money as there is in the card. The parent is thus able to control to some degree the spending behavior of the child. They could use the prepaid bank card anywhere that the bank card brand is accepted.
Prepaid Credit Cards as Gift Certificates Some prepaid bank cards function like gift certificates. You buy the prepaid bank card for a certain amount, and your recipient can buy items with it at any of the brick-and-mortar stores or online merchants, and also for mail order items, that accept the specific bank card brand. Your recipient can use the prepaid bank card only up to the total amount of money that you loaded on it. This kind of version of prepaid bank cards is non-reloadable.
Like any gift certificate, recipients of prepaid bank cards can purchase whatever it is they desire anytime they want. Unlike a gift certificate that, when it gets lost is lost forever to the recipient, prepaid bank cards may be replaced if it gets lost or is stolen.
Prepaid Credit Cards for Travel There is a prepaid bank card made for travel. These reloadable prepaid bank cards can be bought in place of travelers’ checks or cash. In ways, it combines the best options that come with a bank card and a traveler’s check because of its convenience and security features. In case you lose the prepaid bank card while you are on travel, you can easily obtain a crisis replacement, both for the prepaid bank card and some cash.
Prepaid bank cards for travel are accepted all over the world, and also enable you to obtain currency from ATM machines. When you really need to reload and you’re already traveling you can arrange for the reload by phone or online. Besides the truth that it is just a prepaid bank card, you should use it exactly just like a regular credit card. That also means you enjoy other benefits as being a regular card — reimbursements for lost luggage all the way to $1,000 per cardholder if your luggage is lost; zero liability if your prepaid bank card is used fraudulently once you lose it or have it stolen from you; purchase security up to $500 per claim for any items you buy with prepaid bank cards, which subsequently gets stolen or damaged for many reasons.
Generally, you can get prepaid bank cards of all the major bank card brands at their participating retailers. You don’t have to worry about not having acceptable credit because prepaid bank cards are made available without need of a credit report or perhaps a bank account. The sole qualifications you must have are that you have reached 18 years of age and that you need to have the ability to present a valid identification issued by government.
Disadvantages of Prepaid Credit Cards There are always a few reasons for prepaid bank cards that may possibly not be as convenient as the regular credit cards. For one thing, you load only so much money onto it. You will need to record the balance on the prepaid bank card because not every one of the merchant terminals where you use the card may have the ability to allow you to determine it. However, you will find procedures that inform you how to ascertain your balance, and you’ll these detailed on the trunk of the prepaid bank card and in the instructions accompanying it.
The method of reloading your prepaid bank card might be a little inconvenient to some. If you’re using cash, you would have to visit the participating outlet where you got your reloadable prepaid credit cards. The more convenient way is likely to be reloading online.
Additionally there are the charges. Prepaid bank cards impose an application fee, the total amount of which varies with the issuer, and there is also something charge that you’ve to pay monthly. You also have to pay for transaction fees, charges once you transfer funds to top up the balance, once you replace your prepaid bank card, and a great many other fees. To be certain in regards to the fees, you ought to read closely the fine print on the prepaid bank card account.
Prospects of Prepaid Credit Cards Prepaid bank cards do not provide credit; it is your hard earned money that you’re using. You are asked to pay other charges, so it is not for free. 소액결제 현금화 You are paying for the convenience and security of carrying plastic as opposed to large amounts of cash. People who have bad credit will have the ability to do something as though they’d a typical bank card and enjoy the convenience of one.
Issuers of prepaid bank cards realize so it is a good way to monitor the credit behavior of the cardholder. A prepaid bank card would be a source of information that indicates to the credit bureaus and issuing lenders about the manner in which you as the individual cardholder use the card to pay your bills such as utilities. If these consumer data might be formatted in such a way as to provide the cornerstone for a statistical model on probable future behavior in spending, then this can end up being the foundation for developing a credit history.
You’d benefit, because by using prepaid bank cards you’re rebuilding your credit. The prepaid bank card issuers would benefit, too, because they’d be making previously unproven customers bankable. More people could then qualify for regular credit, and that will mean tremendous incremental revenue for the lenders.
