Posts Tagged ‘Bad Credit Credit Cards’

Credit Card For Teens / Students

A prepaid credit card is the credit card for teens or students. Unlike a normal credit card, no credit check is required and there is no chance of your teen running up a large credit card bill.

Perhaps your teen mainly shops online or would prefer not to carry cash but due to a lack of any credit history they can not apply for a regular credit card. (And, let’s face it you probably wouldn’t want them to have one anyway). But, remember, it can be a great way to teach them basic budgeting.

Teens and students often need credit cards for a variety of reasons. They make it easier to purchase a variety of goods and services and are great to have on hand in case of an emergency. But maybe they’re not quite ready for a regular credit card. A prepaid credit card is just what they need.

Advantages of a Prepaid Credit Card

Prepaid credit cards operate more like a checking account with no overdraft facility. Money is prepaid onto the account and cannot be overspent.

The best part of the prepaid credit card is that your teen can charge to their heart’s content and they won’t be in any debt. The money is theirs and once it’s gone, they can’t spend any more until they make another deposit. And you can make deposits on their behalf. There are no bills and no interest charges. It’s the same principle as using a debit card linked to a savings or checking account.

Disadvantages of a Prepaid Credit Card

Well, they’ll have to pay a small fee to set up the account. In addition, they’ll have to pay additional fees every time they deposit more cash into their repaid credit card account. Also note, certain types of service , like a monthly internet subscription may not accept a prepaid credit card.

If you’re looking for a credit card for your teen, consider a prepaid credit card. They have most of the advantages of a normal credit card but you won’t have to worry about your teen getting into debt. And it’s a great way to teach your teens how to budget!

Prepaid Credit Card Application FAQs

If you are about to make a prepaid credit card application it’s likely you will have a number of questions. This short article will answer your main concerns.

What are Prepaid Credit Cards?

Prepaid credit cards are not a credit card as such, as no credit is offered by the card issuer. Money is placed, or “topped-up” on the card first and you can only spend what is available on the card at any one time. But, they carry a credit card brand (Visa, MasterCard, American Express or Discover) and can be used in the same convenient way as a normal credit card.

Who Are Prepaid Credit Cards For?

The short answer is anyone can apply for and use a prepaid credit card. There are no credit checks so, they are particularly useful for young people, teenagers or students, who have not yet built up a credit rating, or people with a poor credit history. But they can also be ideal for people who simply don’t want to run the risk of running up a large outstanding credit balance. They can be used for learning budgeting skills and can even be given as gifts.

Are There Any Charges On Prepaid Credit Cards?

Yes, of course, but as you can only spend what is already available on the card you will not incur any debit interest charges. Charges are typically for: the initial issue of the card; an annual or monthly fee; transactional charges. In nearly all cases the charges are small and dependant on how you want to use the card. For example, some cards have a monthly fee but with minimum transaction charges. Other cards are ‘pay as you go’ in which case there may not be a monthly or annual fee but you will be charged per transaction. You should, therefore, carefully consider how you will be using the card and then shop around for the best deal for you. You may also be charged if you make any transactions with the card that subsequently fail for some reason.

What Can I Use Prepaid Credit Cards For?

Pretty much anything that you would with a normal credit card (provided sufficient funds are already stored on the card.) You can shop on or offline, book travel and hotels, etc. even pay certain bills on some cards. Indeed, some cards act more like bank accounts. You can have your salary / wages paid into the card account and also set-up direct debits, etc. They are very flexible but remember there will likely be a charge for such transactions dependant on the card conditions.

Are Prepaid Credit Cards Safe?

Yes, in fact, in many ways they are even safer than normal credit cards. The amount available on the card at any one time is limited to the balance stored on the card and not a (likely to be) much larger credit card limit. Also many cards allow you to store your money off the card in a related Eaccount. In this way you can ensure that the card is only charged up with what you need on a day to day basis.

So, if you on the point of making a prepaid credit application I would certainly recommend them. They are safe and convenient and a great way to manage your budget.

Avoiding Credit Card Debt Before It Sneaks Up On You

In this modern time where the economy has been such a challenge for everyday people like you and me to keep up, it’s easy to get into credit trouble when your credit bills begin to stack up. So if you are in the position to just start learning the ropes of the world of credit cards, there are a lot of things you can do to avoid credit card debt before it sneaks up on you and keep your nose clean, as they say.This is an outstanding goal for you if you are just getting your first credit cards. If you know or talk to anyone who is battling tens of thousands of dollars of credit card debt, you know what a jail sentence it can be. Once that credit card debt gets that high, the time it will take even under the best of conditions to bring it down runs into the years if not decades. And for all that time, thousands of dollars of money goes down the drain to credit interest that doesn’t buy you any food, tickets to the movies or new clothes. It just goes away with no value to you at all.But if you are new to the world of credit, getting a credit card is a good thing. But once you get one, keeping it under control is job one. You will find it amazingly easy to use a credit card once it comes. In fact, the retail world makes it difficult to conduct transactions any other way. You can pay for gas at the pump that way and even charge your groceries at the grocery store. And while all of these great uses for credit are helpful, you can end up with a whopper of a credit card bill at the end of the month. And if you don’t pay that bill off, that is the first step on a lifelong jail term in credit card debt jail.So there are some guidelines you should follow to both use credit responsibly but also to keep building your credit rating which has a real value to you. Remember that what the credit card companies don’t tell you is that making a charge on a credit card is a loan. Even if you just charge ten bucks to go to the movies, you took out an unsecured loan to finance that movie ticket. So once you start using a credit card, keep in mind that you will be paying back everything you run up on it. It is NOT free money. A good practice is to save every receipt every month and keep a running tally of what you have spent on credit. Now only can you use that to cross check your credit card, it keeps you honest because each time you add a charge to your credit card, you can update your tally so you know for certain that you will be able to pay it off when the bill comes.Paying off the credit card each month is the number one best way to keep your credit problems under control. Now it isn’t a bad idea to let a little bit of the debt drift from month to month. This builds your credit history and credit rating which will pay you well down the road when you want to buy a larger purchase. But by staying on top of your credit and what is going onto your card, you will start out with the kind of habits that will lead to a life of good credit use without credit card jail. And that is a wonderful gift to give yourself early in life.

Credit Card Tricks

when it comes to the dozens of credit card offers that you get in your mailbox every week, you might think that some of these credit card companies would like to be on the next series called “Stupid Credit Card Tricks”.These promotions that you get for credit cards seem to be playing on just about every tactic they can find to get you to take out yet one more credit card. You would think that the fact that credit card debt is a virtual epidemic in this country would let the credit card companies know that its time to get on the side of the consumer to learn responsible use of credit. Instead they do all they can to get you to have more, not less, credit cards and use them as much as you can.We need to be smart consumers because as much as credit card companies try to make credit cards seem fun and happy and like big toys in your wallet, they are not toys. We should never forget that a credit card is nothing more than a way for the credit company to extend to you dozens of small unsecured loans that they will create credit payments on the fly to enforce through your credit card bill that will include high interest rates and additional fees as they see fit.This is not to say that having a credit card is not a good thing. Good credit is one of the real assets any responsible adult will use to help make life easier and to make the necessary purchases in life. And more and more credit is becoming the currency of choice replacing cash and checks as the preferred method for paying for gas, at restaurants and any more even at retail outlets and grocery stores.While the spread of credit as actual currency is a fact of life for us, it is also a major move by the credit card companies to take over the economy and to make you even more dependent on them. So the best defense is to take charge of your credit card life and make sure that you are the boss of your credit cards, not the other way around.The stupid credit card tricks can be really fun to look at and sometimes enticing. They will appeal to your sense of school pride by giving you a credit card in your college school colors. You can get credit cards that give donations to save the environment, help the poor or create a college fund for your kids. There are all kinds of premiums, cash back concepts, frequent flier miles and gifts and toys that credit card companies will fork over just to lure you into getting more credit cards and using them a lot.To put it bluntly, you and I need to learn not to be suckers for these deals. We can laugh at the stupid tricks they try to use. But if a credit card company is going to try to trick you into getting a card or using one, they are not doing business honestly with you. You want a credit card company that deals straight with you. They should offer fair rates that don’t change at the drop of a hat. They should sustain a reasonable credit limit and not always be jacking it up to try to get you to buy more stuff on the card. And they should have good customer service and be ready to renegotiate your relationship with them so you are getting good value from their service, not just paying for a bunch of toys and frills that do you no good whatsoever.By keeping in mind what a credit card company actually does and that credit cards are mature adult tools, not games or toys, we can keep in perspective how to use our credit cards and how to keep from abusing credit which will lead to the nightmare of credit card debt.

Benefits of Prepaid Credit Cards

Prepaid credit cards appeared in Australia about three years ago. Ever since they are gaining popularity among users or all ages. The fact that users require no credit history and absence of monthly repayments makes it a very attractive way to organise your plastic money.

Different Types of Prepaid Credit Cards

There are two different types of prepaid cards: charge cards and gift cards. A charge card is normally linked to your other savings or cheque account. It gives you a Visa or MasterCard access to your own funds. So, each time you make a purchase with this card, the funds are drawn from your own account. There is no credit from the bank and there is no balance to repay.

But once you run out of your own money, that’s it. You’ll need to deposit (or “prepay”) more funds before you can use this card again. The second type is a Gift Card. It’s like a normal gift card that you can get from a retailer, but with Visa or MasterCard functionality attached to it. So, if you have a $100 Prepaid Credit Card, you can spend this money at any retailer accepting credit cards. Once you run out of credit, there is usually no way to “recharge” it.

Benefits of Prepaid Credit Cards

1: Convenience

Cardholders can use prepaid cards to pay for shopping, petrol and utility and household bills, basically anything and anywhere credit cards are accepted. It can also be used for making payments on the phone or online and, in some cases, withdrawing cash at ATMs.

2: Safety

Cardholders can make purchases and withdraw cash when they need it. Access to funds is the same as with any other credit card. Use your pin or sign the receipt.

3: Protection

A prepaid card can be replaced if lost or stolen and carries the same liability protections against unauthorized purchases as other credit cards.

4: Financial management

Itemized card statements and online reporting that is available to charge cards, make tracking expenses and monitoring spending activity easy. Manage your spending by loading a limited amount of money on the card. You can only spend what is available on the card.

Prepaid Credit Cards in Australia

Back in 2006, Visa’s executive vice-president for Australia and New Zealand, Bruce Mansfield, said that he expects a strong take-up of prepaid cards in general. “Australians are pretty savvy money managers and a prepaid card is a perfect money management tool,” he says. “Australians have lapped up prepaid and disposable mobile phone cards and I expect similar long-term results in Visa prepaid.” (Money Magazine’s June 2006 issue).

Ever since, the popularity is growing with major banks offering prepaid card in store or on the internet. There are many bank and non-bank organisations offering prepaid credit cards.

What’s Next?

To find out more about this product, it’s always best to approach your bank. It makes sense to have your accounts with the same bank, for easy reporting. There is also an ever increasing number of shopping outlets and smaller banks that offer this new product. Whichever way you choose, don’t forget to check with your accountant, lawyer or financial planner. Having an easy way to spend money does not mean that you’ll have more money. It’s wise to be careful and do a proper budget before adopting any new spending activities.