Archive for the ‘Insurance’ Category

What is a Prepaid Credit Card

Tuesday, March 23rd, 2010
Steve Evans recently asked:


bly see them all the time at gas stations or advertised as a solution for people with bad credit. Prepaid credit cards act just like a regular credit card, except unlike a normal credit card there is no line of credit behind the plastic.

They are also known as Pay as you go cards. With a prepaid credit card you have a fixed amount of money you can use. Since there is no line of credit, you don’t have to worry about paying back any debt.

Credit cards are practically a necessity of life these days. When was the last time that you wrote a check. I’d wager that most of us just write one or two checks a year these days and the rest is done by card. It’s almost impossible to rent a car, reserve a hotel room, or make a large purchase without a credit card. Many businesses now require customers to have a credit card on file even if paying with cash or check. What can you do if you have bad credit or no credit?

As we said earlier prepaid credit cards are also known as “pay as you go” cards. They work in a similar way to traditional credit cards. The difference is that prepaid credit cards don’t involve borrowing money from the issuer. You preload the card with money and then use it wherever Visa or Mastercard are accepted. Late fees and interest charges are not applicable. Simply refill the card when the balance is low or depleted.

A prepaid card is much like the gift cards available from most high street chains in the UK, however, prepaid cards have a much wider acceptance, and can be used internationally. They are the same as credit cards, but without the credit. The majority of UK prepaid card providers offer cards embossed with your own name, and some are even CHIP & PIN cards.

A prepaid card is not a credit facility, so you do not need to pass a credit check. Even if you have bad credit or CCJs you are guaranteed to be approved for a prepaid card. However, you are still required to provide details verifying your identity and address (for example a passport, driving licence or national identity card plus a utility bill or an official letter with your permanent or temporary address). Some of the prepaid card issuers will even verify your details online, and give you an instant approval. By the way this is correctly called an electronic identity check, not a credit check!

A prepaid credit card such as a Visa or prepaid Master card can be used like any other credit card to make purchases. With a prepaid card, however, you load funds onto your card and use that money to make purchases and get cash — you are not borrowing money from a bank or other financial institution. The prepaid credit cards look, feel and work like a credit card but are pre-funded “stored-value” cards. This allows you to set spending limits for you or your kids.

So there you have your answer. It is a pre-paid, reloadable card can be used anywhere Visa or MasterCard is accepted — at stores, gas stations, restaurants, theaters, in the mall and online. Making a hotel and rental car reservation is a snap. You can also access cash at ATM\’s. The card is great for everyday purchases, special occasions, and emergency backup.



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Defining the Prepaid Credit Card

Wednesday, March 17th, 2010
Steve Evans recently asked:


ition of a prepaid credit card is: A payment card (usually MasterCard, Maestro, Visa Electron or Amex), pre-loaded with your own money, which you can then use wherever the payment card is accepted, including on the internet and abroad. A prepaid card is much like the gift cards available from most high street chains in the UK, however, prepaid cards have a much wider acceptance, and can be used internationally. They are the same as credit cards, but without the credit. The majority of UK prepaid card providers offer cards embossed with your own name, and some are even CHIP & PIN cards.

Whilst prepaid credit cards can be a very useful product for those with a good credit rating, many card providers target their prepaid products at those with bad or no credit history. With the number of IVA\’s (Individual Voluntary Arrangement) and bankruptcy cases on the increase, there is a growing population in the UK that are unable to get a traditional credit or debit card, without paying extremely high fees.

Considering what a credit card is, the term “prepaid credit card” can be a little misleading. With a prepaid credit card there is no credit being issued to the cardholder. Instead it works much like a checking account where the cardholder deposit funds into an account and as the card is used the funds are automatically withdrawn. Because having a prepaid credit card is similar to a checking account the benefits may not be obvious. Below are some reasons why a prepaid credit card can benefit you.

With the increasing threat of identity theft and the horrors stories one hears from friends or family members that have fallen victim a prepaid credit card can add a level of security by limiting the damage. You can keep your main bank accounts information safer by using a prepaid credit card for online, over the phone, and local market transactions.

A prepaid card works a lot like a gift card with little perks that make it so much better. And everyone is instantly approved.

Your Wired Plastic prepaid card works wherever a visas or master cards are accepted, even gas pumps. With your wired plastic prepaid card you earn points for every dollar that you spend on your card just like you do with other credit cards. Just load, and reload your card as needed.

Many people are concerned that fees must be paid for prepaid credit card fees and these may be excessive.

Use of one prepaid card we heard of recently is subject to a charge, of 2.00 for every ATM withdrawal, 1.00 for every signature purchase and 2.00 for every PIN purchase. Also, they charge 1.00 for all online purchases. The alternative to these charges is to pay a monthly fee.

Of course, instead of buying a pre-paid credit card, you could open up a bank account. That way, you would at least get a debit card linked to your account.

So if you do not want to pay those sorts of charges you can drop that card right now. Take your money and go to a bank like Wells Fargo or WAMU and open a secured Credit Card. You\’ll have to put your money down right then and there (typical minimum is $300) into a locked account. They will then open a Credit Card for you with a maximum of that amount.

A prepaid credit card will act just like a credit card. Online shopping, swiping at the gas pump, and all those other credit items will work fine, so for many with no credit rating there is no real choice but this type of card transaction.

If you have no credit or bad credit then this is what you have to deal with for a while. The fees we have described are not too out off the normal, but they can add up. Do you best to pay the bill on time every month and don\’t max out the prepaid card or you’ll go hungry! In about 6 months you can apply for a better card and stop using that one. By the way to do best at raising your credit rating don\’t close a card account. Just leave it open. The more you open and close cards it looks bad to the credit rating system.



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Why Many People Will Need a Prepaid Credit Card During This Recession

Wednesday, February 10th, 2010
Steve Evans recently asked:


rds are a part of daily life these days. For each of us to establish a good credit rating is very important for many reasons from getting finance to getting a job.

Prepaid credit cards are a way for someone who cannot get a traditional credit card to build credit. The classic case here is the person who has declared themselves bankrupt. Once anyone does that their credit rating is reduced to zero and people describe that as having a bad credit rating, or just bad credit.

This is where a prepaid credit card can be a life saver.

There are some pros and cons to prepaid credit cards, so shopping around and being informed is important when getting one. A prepaid credit card will help build credit without the risk of falling into debt and hurting your credit rating even further.

A prepaid credit card is basically like any other credit card. It is backed by one of the major credit card companies. Prepaid credit cards, though, are completely controlled by the user. The account for the card is opened with a deposit that is then the credit limit. Whenever the user desires more money can be added. Only the amount of money that is in the account can be spent. If the user tries to spend more than their limit the card will be denied.

Walmart and Walgreens provide prepaid credit cards but there are many others. You load the card with an amount of money. Then you re-load it every time you need to use it.

Prepaid credit cards are really becoming popular because they are convenient and allow you to better budget your money than a regular credit card.

Charges vary from card to card, but it’s always best to compare fees before deciding which prepaid card is best for you. You can also find links on the above site to purchase prepaid cards.

Pre-paid credit cards are credit cards in which the owner of the card deposits funds with the credit card issuer to be accessed via the card. This is in contrast to a traditional credit card in which the credit card issuer gives the user a card without receiving any money in advance.

The merchant uses their standard procedure for accepting credit cards of any type. This often involves swiping the card through a terminal. In this case, the terminal is connected to a network that allows the card to be approved or declined. In the case of a pre-paid card, the amount of the purchase is compared to the amount of funds remaining from the original deposit. If there are sufficient funds available, then the transaction is approved. The amount of the purchase is deducted from the funds that were originally deposited with the credit card issuer and the remaining funds become the card\’s new balance.

Any government agency can deposit unemployment benefits, child support payments, etc. directly into a prepaid card, as your employer can do. You might be able to put money in it by yourself. The money can be used right away and the amount you spend or withdraw is deducted from it immediately. Just like debit cards, prepaid cards have a personal identification number.

There\’s nothing simpler. You pay up front. When the card runs out, you refill it. Use it like a credit card, but no bill at the end of the month, only a statement showing what you\’ve spent. That\’s why it\’s prepaid.

All you do is to decide how much to put on your prepaid credit card - and deposit that amount on the card, as you would into a bank account.



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What is the Difference Between a Prepaid Credit Card and a Normal Credit Card

Sunday, November 22nd, 2009
Steve Evans recently asked:


card looks like a credit or debit card. It can be used in the same way as a credit card in shops, restaurants or online, around the world. The main difference is that there is no risk of getting into debt because you can only spend the amount of money that is pre-loaded on the card.

Many people are rejected by credit card companies because they have poor credit. You will not have that difficulty with a prepaid credit card.

The problem with today’s society is that a credit card is needed to book hotels, airline flights or shopping online. This means that people with bad credit can\’t do any of these things because they don’t qualify for a credit card. It is for this reason prepaid cards are becoming very popular.

In particular, a Prepaid Credit Card is a pay as you go credit card. These can be created by a stand-alone company, not one of the traditional banks. Using one can mean that you\’re not using a bank at all! They won’t be concerned about your credit rating.

It basically works like a normal credit card (or debit card), except that it\’s not associated with a bank account. You have to add credit at a reload center, which are located at retailers, check cashing locations and supermarkets (such as Tesco, Safeway, Wal Mart etc), then you use it as you would a normal credit card.

Unlike traditional credit cards, the Prepaid Credit Card does not extend credit to cardholders. Instead, accounts are prepaid for a specific amount, while still being backed by MasterCard/Visa for near universal acceptance. There is no line of credit and accounts are only good for the balance applied.

We will make no apology for stressing that your credit rating is not a determining factor when issuing the Prepaid Credit Cards. All applicants are accepted, regardless of their credit history subject to verification of their address etc. There is no credit check performed with any credit referencing company and the card is therefore available to all. This opens up an opportunity for those who are normally declined mainstream credit card facilities due to adverse credit, low credit score, or lack of credit history. Even young children can use these cards.

As generally used in the English language, “prepaid” and “credit card” are a contradiction in terms. “Prepaid” means you have paid for something before taking receipt of it and will not be receiving a bill requesting payment later. Whereas, “credit card” means that you will be placing the purchase on credit and the lender (issuing bank) will supply the funds to the merchant. Then later when you receive your billing statement from them, you will be required to pay in full or in installments. Thus the commonly used term “prepaid credit card” could be considered an oxymoron. So, it is more accurate calling these cards a Prepaid Visa or MasterCard.

In other words a prepaid card is like a cross between a store gift card and a bank debit card. It is similar to a store gift card in that a certain amount of money has been loaded on it. It is like a bank debit card because it is accepted any place that a major credit card is honored, even online! Unlike a debit card, however, a prepaid card is not attached to a specific bank account.



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Pay by Plastic Without a Risk of Identity Theft With a Prepaid Credit Card

Monday, November 9th, 2009
Steve Evans recently asked:


increasing threat of identity theft and the horrors stories one hears from friends or family members that have fallen victim a prepaid credit card can add a level of security by limiting the damage. You can keep your main bank account information safer by using a prepaid credit card for online, over the phone, and local market transactions.

Considering what a credit card is, the term “prepaid credit card” can be a little misleading. With a prepaid credit card there is no credit being issued to the cardholder. Instead it works much like a checking account where the cardholder deposit funds into an account and as the card is used the funds are automatically withdrawn. Because having a prepaid credit card is similar to a checking account the benefits may not be obvious. Below are some reasons why a prepaid credit card can benefit you.

Credit cards seem almost essential for modern living. The convenience of being able to buy online, book flights, make reservations and so much more make a credit card something that is really worth having.

However, credit cards can bring their own problems and these are well documented. Some people simply lack the willpower to use credit cards wisely and end up spending way beyond their means. So, while the credit facility can be very convenient, it can also be little dangerous.

A prepaid credit card looks like a credit card, and is accepted everywhere credit cards are, but it is not a credit card. Like a prepaid phone card or cash/gift card, the prepaid credit card has a set amount that has been loaded onto the card. When your prepaid credit card is read by a special card reader, you can use up the amount on the card by increments or all at once.

You can prepay any amount, whatever you like whenever you like. It no longer depends on the credit card company and giving you a credit limit. What you deposit is, is what your credit limit will be.

These cards are like debit cards. The funds can usually either be taken out of your credit card account or your bank account.

In this high-tech era of computers and machines, the purchasing power of people is mostly based on card payments. Nowadays, credit cards are almost indispensable in almost any business transaction. For example, nobody can purchase anything online without a credit card, so you are lost without one. With a pre-paid credit card everyone can have one and they can use it to make payments just as long as they have some cash in it or more cash and they top it up.

People who have a poor credit history, have a hard time getting or renewing their credit cards. This is where prepaid credit becomes useful.

A prepaid card looks like a credit card, but works differently. You can use it everywhere MasterCard or Visa is accepted, but you can only spend up to the available balance on your card. With a prepaid card, you load funds onto your card and use that money to make purchases and get cash - you are not borrowing money from a bank or other financial institution.

It can also be used to get cash from ATMs. The card is great for everyday purchases, special occasions, and emergency back-up. As a pre-paid card, it has its own built-in spending limit, set by how much money is loaded to the account and how frequently. When you make a purchase with the prepaid credit card, the purchase amount is deducted from the card balance.



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