The average American household earns $88,000 in monthly credit card and debit card payments and takes in $1201 per year in unsecured debt; now you see some of the credit card companies offering prepaid credit cards to high-risk consumers who have little or no credit history or no ability to build a credit score. These cards are easy to get and easy to secure if you start putting your own money into the account with the company. There just aren’t as many programs out there that allow you to provide secure online purchases so that you earn enough money (and maybe a smaller portion of your paycheck) to pay off that card each month (although some companies might send you one, too). Yet, there are still plenty of prepaid credit cards out there offering the opportunity to provide even-appealable rewards with no pre-approval checks to hide your intentions. One company was able to offer such a program with no pre-approval checks for two simple $30 fees: one is deposited into an account that you set up for automatic withdrawal from checking, another is applied to the balance in your credit file, with the check being automatically charged to your account. Of course, as long as you don’t swipe in either transaction you will clear that unsecured debt free.
Using your prepaid credit cards – Read More to learn more about how they work
Another option with plastic money is the credit line. The credit card company that offers a prepaid credit line can provide you a line of credit through their bank account. This allows you to make purchases that will carry a monthly payment interest, and can be done at a relatively small purchase (over $600) that you can add on to the line of credit. By making payments to the bank account (usually 30-60 times in a 12-month period) it is obvious whether or not you will be able to pay off the card with the funds available. Read More for more information and the fact that it is not a debt the issuer will make to benefit you.
Using your prepaid credit card to pay bills still leaves you with cash available for emergency purchases (not to mention cash that you want in case you have an unfortunate emergency). Your prepaid credit card can also give you other credit card and debit card benefits, like savings that can go towards paying off your card, and unlimited reward points. These benefits are part of what sets prepaid credit cards apart from others other types of products.
The next thing is to determine the total amount of money you have deposited into your account. If you use your prepaid credit card to pay all or most of the bills, you will be able to purchase at a higher interest rate (around 3 percent). Another thing you have to look at for using your prepaid credit card is your income. You have to look at things like your salary, or your expenses, to be able to determine your pre-paid savings account from your prepaid credit card. The biggest issue with prepaid credit cards is that you generally leave room in your checking account for overdraft fees that start too high – if you can build up that much debt over a period of time and leave your prepaid credit card balance on your savings account, you may not be able to pay that bill in full until months after the bill has been put up. But, by building up your prepaid credit card balance on your savings account with the intention of making monthly payments, you can reduce those fees.
Pros and Cons of A Secured Credit Card
When looking to re-establish credit or pay off loans, one of the first things you need to understand before applying is that, in most cases, credit is very tough, and will not be easy to re-establish. Credit cards are hard to get these days however, so what you do is apply for a secured credit card, and then when the credit limit on the card reaches $5,000, you must swipe and pay off the card before you can do anything else with it. If you’re lucky enough to have a secured credit card or you just couldn’t decide what to do with your own money, here are some tips so that you can make sure you get the best out of your secured card and credit cards options:
Avoid using a credit card to buy goods and services you don’t really need or want. Unless you really need and want to buy something, you won’t be able to keep up with the orders you apply to credit cards. If you have money available to spend and don’t mind paying for it, use a credit card to pay for it. This is one of the only ways out of the problem that you should not use a credit card to withdraw money from ATMs.