Prepaid Debit Cards - How They Work

A prepaid credit card is perfect for individuals than have little or no credit history. It is also a great alternative to a bank account.

Prepaid credit cards work like this; you make a deposit on your card/account. Then you use your card to make purchases. The funds are then withdrawn from your account.

You can deposit funds using direct deposit, money gram, western union and a variety of other methods. Most cards offer free direct deposit and this will save you a lot of money by not having to pay for check cashing fees.

Most cards offer an additional feature that allows you to use your account just like a checking account. You can write physical checks to companies or individuals. This can be used to pay bills such as car insurance, cable or rent. This will save you money because you will no longer have the need to pay for money orders.

Prepaid credit cards can also be used at ATM's to access cash. With this card you will never pay interest or overdraft fees again.

Some cards also offer a feature called credit builder. This service keeps track of the payments you make using bill pay. It then reports those payments to a credit reporting agency. This can help you build positive credit and prove credit worthiness to future lenders. This feature is free with most cards.

These cards will be issued as a visa or mastercard. This means your card will be accepted everywhere the visa or mastercard logo is displayed. You can also use your card online and over the phone. You card will not say prepaid on it so no one will ever no the difference between your card and an unsecured credit card or bank card.

Prepaid cards do not have a credit check or chexsystems verification. This means everyone is approved regardless of their credit history.

In sum, it is much safer to carry this card than walking around with cash. You card works just like a checking account and is accepted everywhere credit cards are. You are also guaranteed to be approved.