Prepaid Credit Cards

Prepaid credit cards are designed for individuals who might have difficulty getting approved for an unsecured line of credit but would still like all the functionality and convenience of a regular charge card. While specific features will vary from program to program, a prepaid card generally requires the user to deposit cash or a paycheck (also known as “loading” the card) which will then be used as a secured source of funds for the owner to drawn against for as long as a positive balance is maintained. Prepaid credit cards work just like regular debit or charge cards; you can use them at any location that accepts Visa or MasterCard and some will even issue you a PIN number to use to withdraw cash at any ATM, anytime, anywhere.

People looking to apply for a prepaid credit card are usually concerned about three major determining factors: the annual fee, the application fee, and the participation fee. Annual fees are charges to use the prepaid service on a per-year basis, whereas participation fees are a charge to use the service on a per-month basis. You will rarely see a prepaid card that charges both an annual fee and a participation fee, so choosing between one or the other is simply a matter of deciding where you want your fees paid for in one lump sum (annually) or on more of a pay-as-you-go system.

Please see our library of recommended reading materials on the right for more information & additional assistance with prepaid credit card terminology and selection.