In this article I will be writing about the Prepaid Credit Cards. This is another type of card system used for spending the money. But, it is not an credit card and mostly it is used by the teenagers. This article explains the purpose of the prepaid credit cards and what are the hidden fees included in using these cards. If you have any doubts, please post it in the comments section. You can subscribe to our future articles here.
What is Prepaid Credit Card?
First look into the meaning of prepaid credit cards. Unlike credit cards, prepaid credit cards will not offer you the credit limit. You have to deposit money to your card and will use the card for shopping. Why should I deposit my own money and spend it later?. This card is intend to attract the teen lagers and are minors eligible to apply for the prepaid credit cards. For example parents can get a prepaid credit card in their child’s name and give it to them for their use. They need not wait for the parents to make shopping from the credit cards. This is the main purpose of the prepaid credit cards. The prepaid cards are carrying the same brand like Visa and MasterCard. So, it will be used anywhere in the world.
Prepaid Credit Card Fees
There is no interest payment involved in the prepaid credit cards. But the banks are charging more fees to use the card and charging service fees too. This makes the prepaid credit cards become expensive to use our own money.
Because of the many fees that apply to obtaining and using credit-card-branded prepaid cards, the Financial Consumer Agency of Canada describes them as “an expensive way to spend your own money”.The agency publishes a booklet, “Pre-paid cards”, which explains the advantages and disadvantages of this type of prepaid card.
In this article I have written about the prepaid credit cards and its purpose. There are many types of the prepaid credit cards or smart cards available in the market and almost all the banks are offering the prepaid credit cards. In my future articles I will be writing in details about different types of prepaid credit cards. Thank you for reading the article!! If you have any doubts please post it in the comments section. I am happy to answer all your queries.