Using a Prepaid Credit Card As an Alternative to Conventional Postpaid Credit Cards

Prepaid credit card can be an alternative to conventional post paid credit cards.

There are several credit card providers that deal in prepaid credit cards today. Even well-known credit card giants like Visa, MasterCard and American Express have prepaid credit cards to offer. Prepaid credit card works much like a prepaid mobile phone card. Before you can use it you have to load money on to it. Once loaded you can use a credit card for the amount that the credit card has been charged with and when exhausted you can recharge it went desired amount of cash once again.

The need for a prepaid credit card arises in various situations. It is a fact that transactions in certain circumstances and situations are not possible without a credit card. Examples of such transactions are car rentals, online booking of hotels and airline tickets, online shopping etc. They may be reasons why a person cannot get regular credit cards such as the lack of a credit history. For such a person a prepaid credit card may be the only option. Although a prepaid credit card does not help in enhancing the credit history of a person it does afford the conveniences of a regular credit card. Another situation where people prefer a prepaid credit card is when they are travelling long distances or going abroad. They prefer this method of carrying cash and avoiding the risk of getting their regular credit card stolen.

You can load a prepaid credit card with the desired amount of cash and then use it to the time that the amount is exhausted. For example, if you load your prepaid credit card with $500 you can continue to use the card till you have exhausted this amount. Every time you make a purchase that amount of money is deducted from the balance on your card. So if you shop for $150 on a card that has been loaded with $500 you will have a balance of $350 remaining. Managing a prepaid credit card is pretty much like spending from a savings account rather than a regular credit card. The money that you spend has already been deposited by you in an account and is not money on credit in the strict meaning of the term. You do not have to worry about interest, finance charges or late payments.