Pros and Cons of PrePaid Debit Cards
Pros and Cons of PrePaid Debit Cards
Do you have bad credit or no credit? Relax; you can rebuild your credit with a prepaid card.
Prepaid cards are not credit cards; you cannot spend more than the balance you have deposited and you will not be charged interest for your spending. The prepaid account will not be reported to the credit bureaus the same as a credit card.
Pros:
- Easy to get approved with no credit necessary
- The same fraud security as a regular credit card
Easy to use for online or phone purchases
- Can withdraw cash from ATM machines
- Less expensive than check cashing services
Cons:
- Costly fees for opening and maintaining the account
- Fees for loading money on the account or using the card for purchases
- Although some report to credit bureaus, not all do
- Does not help improve your credit the same way a credit card or secured card would
- Much more expensive than opening a checking account and using an ATM card
Fees and charges can vary significantly between different prepaid credit card offers. Be sure to read the fee schedule for the prepaid credit card before you apply.
Tags: credit bureaus, payday advance, prepaid cards, prepaid debit cards