What are prepaid credit cards?

Credit card prepaid, more precisely known as secure credit cards, have a security -based credit limit that the account holder must create in advance. In all other respects, this type of account acts as a standard unsecured credit card. Credit accounts of all types require that payments be made in time and the account will be used responsibly, but the security deposit reduces the risk to the bank, which makes it easier for many people to prepaid credit cards.

loan vs. Debit

Prepaid Credit cards differ from prepaid Debit cards. The debit card deducts the funds from the amount of money stored on the account associated with it, while the credit card makes purchases on the loan, which must be repaid using the funds from another account. In the case of a secure card, the funds used to pay the account in most situations cannot come from a security deposit. Prepaid credit card s. If timely payments are not possible, a prepaid debit card may be a more suitable solution because the money will be automatically deducted.

get an account

In order to open a secure credit line, the applicant must first find a company offering this service. Prepaid credit cards may require an application fee and an annual fee. The amount that the issuing fees may vary considerably, so the applicants should thoroughly explore any card they are considering, together with the company and the credit agreement. A person will have to apply for a card as with any other credit request.

After approval, the person will have to create an account and pay a security deposit. The amount of deposit is usually the same as the credit limit; It may be possible to increase this limit if more money is added later. Once the money is saved, the account holder is issued by a physical credit card that can be pOut just like any other.

will usually be a person who opened an account every month sent an account for the amount of money he charged on the card. However, each society has its own policies and all accounts should have clearly mentioned maturity. If the payment is omitted, the account holder is likely to be charged and any amount that is not worthwhile at the end of the billing cycle will have an interest fee - a certain percentage of this original amount is added.

advantages and disadvantages

bad credit people are often eligible for a prepaid credit card, even if the state does not have to be approved for standard. As such, it is often used as a way of building a good loan. By issuing regular small fees every month and paying them, the debtor can show that he or she is financially answering. In many cases, a secure account can be transferred to an unsecured account after a year after a year after a year.

Many prepaid credit cards, however, afterIt makes very high fees and interest. This means that if the fees are not repaid every billing cycle, the amount it owes can grow rapidly. As a result, a secure account may be more risky than other types, as the deposit may be forfeited if the debtor cannot pay. In addition, the preciousness does not have to earn big interest and the account owner cannot be easily accessed.

In some cases, a prepaid credit card may be "tagged" as such for a debtor's credit report. This tells other potential creditors that the account is secured and can make it difficult for a person to improve his loan. A person who is already fighting financial problems with a person E.