==== ====To Compare Credit Card Offers and Find the Card Thats Right For You, please visit:www.CreditResourceUSA.com==== ====Observers in the lending industry have estimated that there may be at least 50 million Americanswho are not able to qualify for credit. These consumers are usually young, often members of theminority groups and unbanked...and they are faced with the long-standing dilemma of credit: howcan I build my credit record if no one will give me any credit at all?One of the answers offered by credit card companies is a variety of prepaid credit cards, designedfor use by specific segments in the market. The prepaid credit cards are meant for that significantportion of the population that cannot meet the qualification criteria for regular credit cards, or whoqualified before but have since lost their credit due to repeated defaults and other reasons.Advantages of Prepaid Credit Cards For those who do not have enough credit history or have hadit blemished, prepaid credit cards are an effective way to build or slowly rebuild credit. That maynot happen immediately, but it is something to work on over time. The banks that issue prepaidcredit cards are also prepared to extend normal credit the moment you are able to show that youhave become a worthy credit risk.For the moment, you may have to make do with prepaid credit cards. You can use prepaid creditcards as you would any other regular credit card to purchase airline tickets, reserve hotel rooms,or order items online.Prepaid Credit Card for Students There is a special prepaid Visa credit card for students, whichoffers a lot of convenience not only for the students but also for their parents. These reloadableprepaid credit cards offer parents several options on how to reload. Parents can add money toreloadable prepaid credit cards by depositing money, by arranging an automatic transfer of fundsfrom their account (a deposit account or their own credit card account), or by online transfer. Usingthe prepaid Visa credit card is no different from giving the regular allowance to their child, onlythey do so by electronic means and there is no more cash that changes hands.The big advantage of the prepaid Visa credit card is that the student is limited to spend only asmuch money as there is in the card. The parent is thus able to control to some extent the spendingbehavior of their child. They can use the prepaid credit card anywhere that the credit card brand isaccepted.Prepaid Credit Cards as Gift Certificates Some prepaid credit cards function like gift certificates.You buy the prepaid credit card for a certain amount, and your recipient can purchase items with itat any of the brick-and-mortar stores or online merchants, and also for mail order items, thataccept the particular credit card brand. Your recipient can use the prepaid credit card only up tothe amount of money that you loaded on it. This particular version of prepaid credit cards is non-reloadable.
Like any gift certificate, recipients of prepaid credit cards can buy whatever it is they want at anytime they want. Unlike a gift certificate that, when it gets lost is lost forever to the recipient, prepaidcredit cards may be replaced if it gets lost or is stolen.Prepaid Credit Cards for Travel There is a prepaid credit card designed for travel. Thesereloadable prepaid credit cards can be purchased in lieu of travelers checks or cash. In a way, itcombines the best features of a credit card and a travelers check because of its convenience andsecurity features. Should you lose the prepaid credit card while you are on travel, you can easilyobtain an emergency replacement, both for the prepaid credit card and some cash.Prepaid credit cards for travel are accepted all over the world, and also allow you to obtaincurrency from ATM machines. When you need to reload and you are already traveling you canarrange for the reload by phone or online. Apart from the fact that it is a prepaid credit card, youcan use it exactly like a regular credit card. That also means you enjoy other benefits just like aregular card -- reimbursements for lost luggage of up to $1,000 per cardholder if your luggage islost; zero liability if your prepaid credit card is used fraudulently after you lose it or have it stolenfrom you; purchase security up to $500 per claim for any items you buy with prepaid credit cards,which subsequently gets stolen or damaged for certain reasons.Generally, you can purchase prepaid credit cards of all the major credit card brands at theirparticipating retailers. You dont have to worry about not having acceptable credit because prepaidcredit cards are made available without need of a credit report or a bank account. The onlyqualifications you need to have are that you have reached 18 years of age and that you must beable to present a valid identification issued by government.Disadvantages of Prepaid Credit Cards There are a few things about prepaid credit cards that maynot be as convenient as the regular credit cards. For one thing, you load only so much money ontoit. You will need to keep track of the balance on the prepaid credit card because not all of themerchant terminals where you use the card may be able to help you determine it. However, thereare procedures that tell you how to determine your balance, and you will these detailed on theback of the prepaid credit card and in the instructions accompanying it.The process of reloading your prepaid credit card may be a little inconvenient to some. If youreusing cash, you would have to visit the participating outlet where you bought your reloadableprepaid credit cards. The more convenient way will be reloading online.There are also the charges. Prepaid credit cards impose an application fee, the amount of whichvaries with the issuer, and there is also a service charge that you have to pay monthly. You alsohave to pay for transaction fees, charges when you transfer funds to top up the balance, when youreplace your prepaid credit card, and many other fees. To be sure about the fees, you should readclosely the fine print on the prepaid credit card account.Prospects of Prepaid Credit Cards Prepaid credit cards do not provide credit; it is your money thatyoure using. You are asked to pay other charges, so it is not for free. You are paying for theconvenience and security of carrying plastic instead of large amounts of cash. People with badcredit will be able to act as if they had a regular credit card and enjoy the convenience of one.
Issuers of prepaid credit cards realize that it is a good way to monitor the credit behavior of thecardholder. A prepaid credit card would be a source of information that indicates to the creditbureaus and issuing lenders about how you as the individual cardholder use the card to pay yourbills such as utilities. If these consumer data could be formatted in such a way as to provide thebasis for a statistical model on probable future behavior in spending, then this could become thefoundation for building a credit history.You would benefit, because by using prepaid credit cards you are rebuilding your credit. Theprepaid credit card issuers would benefit, too, because they would be making previously unprovencustomers bankable. More people could then qualify for regular credit, and that would meantremendous incremental revenue for the lenders.Credit-Wisdom.com Provides Expert opinions and reviews to help you Compare and Apply for aCredit Card - Compare Credit Card Offers with Credit-Wisdom.com - Unraveling the best inPersonal and Business Credit Cards [http://www.credit-wisdom.com/creditcards/business-credit-cards.php]Article Source:http://EzineArticles.com/?expert=Richard_Gilliland==== ====To Compare Credit Card Offers and Find the Card Thats Right For You, please visit:www.CreditResourceUSA.com==== ====