Consumers Making The Switch To Prepaid Debit Cards and Online Lenders

Prepaid credit cards are witnessing a steady rise in popularity with many opting for them, as compared to conventional credit cards. With mounting rates of interest, different types of charges and penalties, cardholders are finding prepaid credit card as safer bets. Though the US economy has improved, there is still an air of speculation about the US economy.

Credit card companies are holding back on credit card applications as a way to immunize themselves against potential losses. At the same time, there has been an increase in applications for bankruptcies with more than 1.25 million cases seen during recession. Among alternatives that consumers are looking for, debit cards, secured credit cards and prepaid credit cards are getting a lot of appreciation.

Prepaid credit cards do not require any collateral in the form of a bank deposit; they do not even have credit limits. Most people who opt for such types of cards are those with poor credit, maxed out credit limits and often find it tough to find their applications approved by banks.

As we know, secured cards have credit limits equivalent to the amount of money put in the bank deposit. But in prepaid credit cards, there are no such things as credit lines; you have to load funds into the card before you can start using them. This gives consumers better control of the transactions they make using the card.
Bill Forrester, a credit card user who has turned to prepaid credit card says, “This carries the convenience of plastic without the trappings of high interest rates and stupid surcharges. They replace cash in a much better manner.” Secondly, prepaid credit cards ten to be accepted anywhere major credit cards are accepted. This really gives you flexibility of cash and ease of carrying plastic.

Suppose you want to make an online purchase and you are reluctant to give our credit card information. In this case, the prepaid credit card can be your best help; you can make the purchase and still do not need to give any information to your online merchants.

The other significant benefit of using a prepaid credit card is that you pay only for things that you can afford at particular point of time. This means, you do not have to worry about balance transfers, payment for other benefits apart from the interest rates. You can compare these cards as your regular bank accounts, and directly deposit paychecks into the prepaid credit card instead of a bank account. This makes way for easy management of money even for the younger lot who are looking for their first credit card. They do not have to be worried about being burdened by unnecessary charges on their card.

There are however a few charges associated with prepaid credit cards which include application fees, activation charges, maintenance fees and even additional charges for using their ATM services. The flip side is you cannot delay your payment, the way you can do with a regular credit card. Also, one should know that you may be charged a certain amount as fee if you do not keep a quarterly balance lie the way it happens with regular bank accounts.

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