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Prepaid Credit Cards

Jan Mayrhofer By Jan Mayrhofer on
Badge: Publisher | Level: 14 | Finances Expertise:

A prepaid credit card is a lot like a gift card, except that it can be used anywhere that Visa, Mastercard, Discover, or American Express cards are accepted. They come in denominations ranging from $25.00 to $500.00.

These cards are a popular choice for graduation gifts and any other occasion where a gift card type of gift is called for. When you just don't know what in the world to get that special someone, or if you need to buy a remembrance of some kind for someone you do not know very well, the prepaid card is something that will be appreciated by anyone.

I have bought a prepaid credit card for my 17 year old son to use for expenses while he is at school so that I can give it to him once at the beginning of the week or month and not have to worry about him carrying around a lot of cash.

There are two things I don't like about this type of card: there is a loading fee, and there is also a monthly maintenance fee. Still, when you think about the fact that it offers the same convenience as a credit card, but without the interest, you are probably spending less on fees than you would on a credit card's interest.

Some people use the prepaid credit card for online purchases. This is a good option for those who do not have credit cards for whatever reason.

You are not allowed to get cash back on these cards, though, so it is not like a debit card. Even though it is your own money on the card, you are confined to credit card rules and regulations.

You can purchase one of these cards at your grocery store credit card center where they are displayed with all the gift cards.