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What are Prepaid Credit Cards?When the average person is rejected for credit, it is because they have poor credit.
However one must have a major credit card in order to make hotel and motel reservations, to rent a car and make flight reservations. You also need a credit card for placing orders online or over the phone. Usually if a person has bad credit or no credit cards, they had to relay on family and friends to help them out or find other means to accomplish these things. However, with a prepaid credit card, now these people have the same freedoms as a person with a regular credit card. Opening a prepaid credit card account is as simple as depositing money into that account much in the same way you would deposit money to open a checking or savings account. Usually once you have money in the account, you're issued the prepaid credit card, which can now be used as a regular credit card, with some exceptions. You will not be able to use it to pay for monthly Internet subscriptions, or to purchase anything where you will have a monthly deduction taken from your card. The reason for this is that many companies are afraid that you will not have the money in the account. Once the money in your account is gone, you will not be allowed to use the card for any more purchases until you make another deposit. With prepaid credit cards there are no bills and no interest charges, much like debit cards. The difference between prepaid credit cards and debit cards is that you have to pay a fee to set up your account. The amount of this fee varies, but usually ranges from US$5 to $10. In addition, some banking institutes will also charge you additional fees every time you make a deposit into the prepaid credit card account. However, this also varies from bank to bank with many wavering this extra fees if you keep a minimal amount in the account and do not go over your limit. Prepaid credit cards are also excellent for students and individuals who are traveling abroad. Many times, if you are using the prepaid cards for these purposes the bank will also waver the activation fees. So if you are trying to establish credit, or if you have a child going off to college, or are planning to travel abroad, then consider a prepaid credit card. They allow you the freedom to make reservations, rent a car, and even purchase items with out the worry of credit card bills or interest payments.
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