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Prepaid Credit Cards Unleashed 
 
by Delores Williams August 25, 2005

Where to purchase Prepaid Cards

Prepaid cards can be purchased anywhere from malls to the local gas station. Typically, the cardholder will buy a card; take to the counter to be loaded with the amount the person wants to have on the account. Usually the credit cards will require a minimum of $20, which includes the card fees.

After the card is set up at the store, the company will send a hard card with the account name and number, which will be needed in order to make in person purchases.

Benefits of a Prepaid Card

The main benefit of a prepaid card is no bill at the end of the month. If there is no money on the card, then the charge will not be approved.

For people with no credit or bad credit, the prepaid card allows a user to have a credit card without a credit check.

Many of the targeted audience are poor minorities who do not believe in banks, so most of the cards allow direct deposit, so the user will not have to pay check-cashing fees.

Another benefit is the ability of the cardholder to rent vehicles, make purchases online, and make cash withdrawals.

Drawbacks to Prepaid Cards

The main drawback to prepaid cards is that they do not help people establish or rebuild credit. Though some card providers will offer this service, most of the time a fee is involved for them to put your history with the major credit check companies.

A huge issue with prepaid cards is that some come with the term “Debit” on it. Most rental places require at least a secured card, so if this is the motivation for the card, then you might want to look into other possibilities, such as the secured card.

The fees associated with some of the prepaid companies can be staggering. For example, Rush Card charges a $1 per transaction, until it reaches $10.00. If the fees are over $10 then the excess charges are returned to the account the following month.

Loading fees can be enormous if the company only uses Western Union or some other pay program. A minimum load fee will be $4.95. Just getting started with some prepaid companies can be costly. The average price seems to be $19.95.

The final fee is usually for customer service by phone. The above companies prefer that everything be done by Internet.

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