The New Consumer Champion - Prepaid Credit Cards - Finance - PersonalFinance

Though credit cards have become an important part of our life, making credit card repayments is still a major challenge for many people. Prepaid credit cards or prepaid debit cards, as they are also known, are considered helpful in these situations or even to prevent such situations from arising as it encourages users to use their own cash.

Obtaining a prepaid card is a fairly easy and simple process and you can deposit funds into your card account, once you have your card. When making a purchase using your card, your account gets debited by the amount you spend as would be the case with using a normal debit card attached to a bank account.

- Extra Features with Prepaid Credit CardsTo prevent you from overspending and building credit debts, some prepaid debit cards are equipped with credit limit feature which puts a limit on your expenditure which is 40-50 % of the total amount present in your account. This is typically the case with prepaid cards issued in the United States but some providers in the UK are now starting to introduce this functionality as well.

Apart from the benefit to the user, this approach is also useful for the card provider as they do not have to worry about the recovery process of this money as the money actually belongs to you - the end user.

- Additional Benefits of Prepaid CardsPrepaid debit cards provide help users manage their accounts and finances better thereby providing better overall financial stability and helping them maintain good credit history and improving their financial status. They are pretty easy to get as compared to conventional credit cards which usually require applicants to fill in a rather lengthy and often complex forms which ultimately lead to a rejected application. Of course, whether it is credit improvement facility via a prepaid credit card or monthly payments on a credit card, missing a payment is not recommended as your credit history can be adversely affected.

Prepaid cards are an excellent option for teenagers due to the lack of credit risk and no checking of credit history is required in the process and a number of free prepaid cards are also available. Whatever your need or want, prepaid debit cards are an excellent alternative to conventional credit cards and other credit products.