The Benefits of a Prepaid Credit Card

Perhaps the first thing to be said is that a prepaid credit card is something of a misnomer. If something has been prepaid, then it is not strictly speaking, of course, a "credit" transaction. But the name has caught on because prepaid "credit" cards can be used - for most intents and purposes - just like a standard credit card.

The principle behind the Prepaid Credit Card is rather akin to the - now old-fashioned - idea of a book or record token, or a prepaid phone card. In other words, a payment is made in advance against an anticipated future purchase and, provided there are sufficient funds represented by the token or the prepaid card, the transaction can proceed without the need for any cash payment at the time of the purchase.

Prepayment is made by "loading" the card with cash paid in at the Post Office, a bank, a PayPoint or Payzone till. This can be made through an employer, a transfer through a bank, or by using a standard credit card. The prepaid card is then ready to be used in just the same way as a normal credit card would be used.

To complete a purchase, you will need to key in a PIN number at the shop counter and the amount of the transaction is deducted straight away from the balance on the card. The prepaid card can be used in the same way for shopping online.

There are a number of benefits to using a prepaid credit card:

• Perhaps the most important is the control it exercises over spending. Since all purchases are prepaid, it means that you are accumulating no debts through its use and spending is limited to however much has been pre-loaded onto the card:

• It can be a good way of controlling a child's spending, for example, with a monthly statement of how the money has been spent;

• Carrying a pre-paid card is also somewhat more convenient and safer to carry than cash;

• For similar reasons, many such cards are also an ideal alternative to travellers' cheques when travelling abroad. Some providers of prepaid credit cards now also offer currencies such as Euros and US Dollars for easier use when withdrawing the pre-loaded cash abroad. Once again, they are more convenient and probably safer than carrying local currency.

Because prepaid credit cards involve no actual spending on credit, an applicant's credit history or rating is irrelevant to the card-provider, so they will be issued without the usual credit reference checks.

Of course there are charges involved in obtaining and using a prepaid Credit Card and these are probably the main drawback. Some providers may charge an application fee when the card is first issued and others might charge a monthly subscription fee. There may be fees for loading the card with cash and/or fees for making purchases and withdrawing cash. If the card is lost or stolen, some providers might charge for the issue of a replacement and still other providers might charge a renewal fee when the existing card expires.

When considering just how useful prepaid credit cards might be for you and your family, therefore, it would be important to consider how much you are likely to pay for their use.

Source:EzineArticles.com

Finding the Best Cheap Credit Cards

Want to find cheap credit cards? Your best source for information on cheap credit cards is a Web site that not only lets you view the offerings of a variety of credit card companies but also gives you reviews of the various cards by Cheap Credit Card users.

Let's take a look at one site that gives us a glimpse into more than 70 credit cards, some of them cheap credit cards, from many countries of the globe.

The first, the American Express Blue credit card, was reviewed ten times (score is from one to ten, with one being the worst and ten being the best.) Interestingly enough, this credit card had ratings that ran the gamut from one to ten. Overall, its valuation as a cheap (as opposed to more costly) credit card was 7.9, which is quite good. Customer service rating on this card was not quite as good, but better than average at 6.2. 90 percent of the reviewers, or nine out of ten, recommended this as a good buy if you're looking for quality but cheap credit cards.

33 cheap credit cards users reviewed the Aspire Visa credit card. This didn't look to be a good choice for cheap credit card, according to these reviews. Only nine percent of the Aspire cheap credit card users recommended its use, and for overall value as a good buy in cheap credit cards its rating was one out of ten.

Accucard credit card, however, even with only two reviews, was a strong recommendation if you're in the market for cheap credit cards. Both reviewers gave this cheap credit card a rating of ten out of ten. What could be better? One reviewer said that this credit card has great rates and low annual fee (making it a top notch choice when comparing cheap credit cards) and, in fact, you have a lot of variety with this card, actually choosing your rate and credit card, and changing that choice as your needs or budget changes.

The second Accucard reviewer said that it was the best of the cheap credit cards, currently offering 1.6 percent cash back the first six months you use the card.

Virgin credit card, according to the twelve cheap credit cards reviewers that rated it on this site, doesn't seem to be the best choice in cheap credit cards. The overall rating is a very low 1.8 out of ten. At first glance it looks like some pretty extensive accounting and customer service errors on the part of this cheap credit card company. One reviewer talked about a nightmare
experience, especially if you've chosen this card because you need cheap credit cards. First they overcharged the interest, and then they corrected it but overcharged again. Another reviewer said the interest rate on this allegedly cheap credit card went to over 24 percent without any notice.

For customer service the Virgin cheap Credit Card earned a 1.4 out of ten from these reviewers. The same rating was given for value (not one of the cheap credit cards, according to these folks.) Its overall value was a two, with recommendations to purchase from only 17 percent of the reviewers.

Source:EzineArticles.com

How to Use the Balance Transfer on Credit Cards

Balance transfer is an option that credit card companies offer on most of their credit cards. What that means is that you can move the entire balance or part of it from your old credit card to a loan or to another credit card. Perhaps that does not make a lot of sense at first, because you still need to pay the loan off and why go through the trouble of transferring the balance to somebody else?

However Credit Card companies see this as a great way to get another person to use their credit cards, so they often attract people with 0% APR for anywhere between 6 or 15 months, that can make this option very beneficial, but there are things you should be aware of.

What to look out for when doing a balance transfer

Balance transfer fee
Introductory offers with no fee can be found, but often the introductory offer will be associated with a small fee as a percentage of the balance transfer. Some offers will cap the fee at a certain level, but it can also be an uncapped fee.

Cut-off date
Initiate the transfer before the offer expires or you will receive the standard balance transfer APR and fee.

End of introductory period
Be prepared for the standard interest rate that will be applied to your remaining balance once the introductory period ends.

Purchases
Unless the offer includes 0% APR on purchases as well, you should avoid using the credit card for purchases during the introductory period.

What happens when the balance transfer period is finished?

As mentioned previously you will receive the standard APR, but plan ahead and paying high interest rates can be avoided. You know ahead of time when the offer expires, and can look for new credit cards that includes introductory offers from other credit card companies. Start the new balance transfer 4-6 weeks before the old offer expires, to allow time for credit card application to be approved and the balance transfer completed.

Look at your overall debt

Balance Transfer Credit Cards can be a great way to reduce your overall debt, because you can apply the payment towards the debt and not the interest, but if your debt is slowly increasing during this time frame, you can be in over your head and need to look at the monthly expenses.

Source: EzineArticles.com

Pre-Paid Credit Cards - A Useful Alternative

Imagine the scenario if you will: you're out for a meal and have had a really enjoyable time, hopefully in the company of some good friends. Then the bill arrives, you hand over your card to the waiter and he returns soon after with the words we dread hearing in a situation like this:

"I'm sorry sir, your card has been declined"

Credit card fraud is on the increase, with many being caught out by criminals who make use of cloning equipment and internet sites in order to obtain your personal details. Indeed, levels of card and mail order fraud totalled around £300m last year.

However, a growing number of consumers are turning to pre-paid cards in order to make transactions and protect themselves from fraud. If you thought top-up cards were just for mobile phones, you're very much mistaken.

Pre-paid Credit Cards UK - for some - can be as handy as a credit card in terms of budgeting and safety. Indeed, the look like any normal debit or credit card, but can be topped up at post offices and other outlets and then used for whatever you've budgeted for. Some make use of the cards for the purposes of paying in wages, rather than using a bank account, either because they may not qualify for 0% credit cards or just want the added feeling of security that comes with the card ownership.

Because you're putting an exact amount onto the card itself, the risk of overspending is greatly reduced as you're not tempted to pay for absolutely everything - which can help with your monthly budgeting. Students make use of the cards in order to help with their finances throughout the academic year, but they're also popular with the under-18's, which make use of them to ensure that pocket money or earnings from a paper round are secure and can be carried on them at all times.

These accounts can be useful for overseas travel as well, with many travellers choosing to set themselves a budget for when they travel. Pre-paid cards can be useful for ensuring you don't overspend on souvenirs. Pre-paid cards can also be loaded with a different currency, which can be vital for your holiday spends if the exchange rate is good at the time.

However, there are drawbacks to owning a pre-paid card. There are the fees for one thing, with withdrawals from cash machines in the UK and abroad having fees attached, which would rob you of vital funds if you're looking to budget. Also, it's still advisable to have a bank account in order to build up a credit score, which can help in future applications for accounts and Credit Cards.

Source: EzineArticles.com