How Does a Prepaid Credit Card Work?

 

It is difficult to carry cash along with you all the time as it can be cumbersome. Most people carry their credit cards in their wallets to make payments for their purchases. Not having a credit card puts you at a disadvantage as they are required for many transactions such as bookings of hotels, air tickets, and even car rentals.

However, if your applications for credit cards have been turned down by companies, you can get yourself a prepaid credit card. These cards have become very popular these days and they look almost like other credit cards. However, they do not carry credit facility and you actually use your own money to make purchases. How do prepaid credit cards work is a question often asked by people.

Make payments to avail services easily using your prepaid credit card

For millions of people not having a bank account, prepaid credit cards have become a very useful tool. They allow many facilities to the user without being linked to a bank account. You get the convenience of a normal credit card when you have a prepaid credit card in your wallet as you can make payments using it at all establishments. You can also use them to buy things online. But unlike a real credit card, there is no credit facility in the case of a prepaid credit card. You spend only what you have in your account and need to replenish the money after you have used up the money in your card.

Despite these limitations, prepaid cards have become very popular because of the convenience they provide to the owners. The fact that you can make use of these cards to make payments in transactions that demand credit cards is the most alluring feature of these cards.

Reload the card with your own money

If where can I get a prepaid debit card is what you are thinking, you can easily get them online while you can also buy them from your nearest centre selling these cards. These cards are backed by Visa and MasterCard networks and accepted by most vendors across the country. Good thing about these cards is that you never receive a bill or a monthly statement for using these cards and there are no interest charges like a credit card when you are running a balance.

However, there are different ways in which companies issuing these prepaid credit cards earn profits. Some charge an annual fee while there are also companies charging a monthly usage fee. There are also companies that charge a fee every time a customer uses the card to make a purchase. It is better to compare the features and terms and conditions before buying so that you get the best prepaid credit card for your use.

 

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