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Understanding Prepaid Debit Credit Cards

Nick Makaryk
Jul 22, 2008
Credit card company's experienced greater losses during the middle 1990's and had to look at an alternative of securing debts. This is when the secured credit card came out and the prepaid debit card was close behind it. Several credit card companies like Visa, American Express and Mastercard issue prepaid debit cards. Funds are added through an online bank or at a retail store to the prepaid debit card. The prepaid credit card works similarly to the prepaid phone card. Cash has been put on a prepaid debit card so the funds are easily accessible electronically. The amount deposited is the limit these cards have. The amount on the prepaid debit cards decrease every time it is used until there are none left.

A wide variety of benefits come with prepaid cards. Not only are they safer for people to carry than cash but they are usable in all countries of the world depending on the company that you get the prepaid debit card from. Some banks and Mastercard, American Express and Visa all offer these cards.

The fact there is no debt or monthly credit card bill to worry with is another benefit. Regardless of past credit if you are over eighteen you can have prepaid debit cards. Since the funds are put on the cards before it is issued even those with bad credit can access them.

As long as there are available funds a prepaid debit card can be reloaded over the phone or online. When on vacation or traveling for business funds can be accessed electronically with ease. Prepaid debit cards are now used by companies in the place of company credit cards or expense accounts.

The fees can be outrageous just like with any other type of card. Fees are associated with acquiring the card, reloading it, going over the limit, cashing out the card and even if you chose to cancel it. Check around to find the company with the best deals since it is better to use cards with fewer fees. Five dollars is the average cost to reload a prepaid debit card so repeat reloading should be cut down on by adding sufficient funds.

A "PIN" number is the only way to access funds on a prepaid debit card. Never let anyone know what it is and change it regularly. In case the card is stolen or if someone gets access to the PIN number it is best to have a daily maximum put on the card by the bank.

For those that cannot get credit cards due to poor credit history preventing them from obtaining them the advantages of the prepaid debit card are more than the disadvantages. Just like any other card it is vital that prepaid debit cards are used responsibly. They can be loaded repeatedly until the funds in the bank are depleted. This type of disaster can be avoided by keeping careful track of purchases.
About the Author
Nick Makaryk is an Internet Publisher, Copywriter, and Founder of Best Credit Cards A Free consumer Credit Card Comparison site helps consumer minded individuals find the perfect credit card while avoiding high interest rates, charges, and no fees. Compare all Low Interest Credit Cards from accredited card issuers Visa, Master Cards, Discover, American Express.
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