Pre-Paid Credit Cards
• As gift cards
• For employee expenses
• For kids away at school
• For travel
• For individuals without checking accounts
A pre-paid card is nothing more than a debit card, to be used against an amount that has been deposited into the account. As such, it is not reported to the credit bureaus and has no value in building or re-building credit.
The terms and fees vary drastically from one card to the next, so it pays to take a careful look at the cards offered and choose the one that suits the way it will be used.
Some have activation fees, some have “load” fees which are paid every time you add funds to the card. Some have monthly fees – and even those differ from one card to another. One might charge a flat rate for the month while another charges based on the number of times you use the card.
Like most debit cards, all have ATM fees for cash withdrawals.
Pre-paid cards can be a convenience for individuals who receive government checks each month and who don’t want the bookkeeping involved in keeping a checking account.
Some of these cards are tied to a long-term agreement and have fees for inactive accounts. So read all the details before choosing your card.
