Prepaid Credit Cards and Secure Credit Cards

It is estimated that 60 million Americans don’t have bank accounts.

For them, a credit card isn’t an option. Some of us want the convenience of having a credit card, but because of poor or even no credit history, an alternative would be to get a prepaid debit card. Prepaid credit cards work like the usual credit cards. Some banks use the term prepaid debit cards. This allows the cardholder to put money on it and then use it like a credit card. It’s easier to use. It’s like having an alternative way of paying the groceries, bills, and even buying something online. Unlike traditional credit cards, credit risk is not a problem for the card suppliers because money is deposited in advance. Compare prepaid card offers.

At the end of 2006, it is estimated that $117 billion worth of purchases will be made using prepaid credit cards. By the end of 2009, MasterCard forecasts that transactions using prepaid credit cards and stored value cards could reach $257 billion. Banks issue prepaid credit cards. These are also marketed through retail outlets and websites. The Credit-Cards.com is an example. Applying on their web site takes you 60 seconds after taking two easy steps. You’ll have the card in five days. There are other companies who sell cards through businesses and use them for rewards programs or incentive or even payroll deposits.

Secured Credit Cards

Another kind of credit card comes in the form of secured credit cards. Collateral that can come in the form of stocks, a car, jewelry, a boat or anything of monetary value is needed for the approval of secured credit cards. With secured credit cards, a security deposit of a certain amount is necessary before one is able to obtain this kind of credit card. Normally, the deposited amount determines the card’s credit amount. People with either poor or no credit at all who are trying to rebuild or clean up their credit history are the ones who prefer this kind of credit card.

A cash collateral deposit determines the credit line for your secured credit cards. With a $1,000 deposit in the account one is allowed to make purchases up to $1,000 only using their secured credit cards. Hence, the bigger the amount deposited in your credit card account means a higher credit limit for your card. Most banks normally reward account holders for their good payment history and would raise credit limits even without additional security deposits. Compare secured credit card offers

As with any credit card application, an applicant should make it a point to conduct a little research regarding the bank or the card for which he is applying for. You need to have enough information regarding their interest rates, required deposits, and other fees. Be sure to pay off balances every month after making purchases. Paying in full every month will give you a good credit rating. Having established this, banks and other financial institutions will want to keep you as a regular client.

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