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| Pre Paid Credit Cards Have Come Along Way In the Last Ten Years |
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Visa was the first credit card company to come out with a pre-paid credit card in 1998. The card was called Visa Travel Money and it was a paradigm shift in the way credit card companies did business. Now pre-paid credit cards are considered that gateway in which new customers or existing customers with bad credit can start down the road to better credit and larger credit scores. The credit card company takes no risk and the customer is given the opportunity to show the world that they are responsible, by paying monthly bills, and that they are worthy of more credit responsibility.
If you are thinking about making a large purchase such as a house or a car, a pre-paid credit card is quite useful. With a pre-paid credit card you do not have to worry about a due date for payment. The money is already in the account and you do not put more money into it until you have no balance. It is like a savings account with no interest. Of course the bank uses your money for investments, but in return you get a better credit score and prove yourself credit worthy. You become self-reliant and even though you don’t have to pay monthly bills, the idea of using a credit card is instilled in your life style and your financial realm.
There are advantages that a pre-paid credit card has over traditional credit cards. If you have a traditional credit card and it comes with a large credit limit, you have the chance of going overboard and spending way to much. With a pre-paid credit card you don`t have that privilege. The money that you have in the account is the money that you put in the account. You can`t spend more money than you have and you won`t get charged with a large amount of interest at the end of the month. If you have 1000.00 in the account that is all you can spend. With defined limits, you can`t go wild on vacation or make impulse buys that you don`t really need. You have to actually think about your finances before you spend.
Some pre-paid credit cards even give you reward points for spending. This means that if you spend money on your card points could add up in which you can trade in for travel, rewards, or cash back. There are even some pre-paid credit cards that offer you a percentage of your purchase. Though not much, sometimes only 1%, it adds up over time. Just like traditional credit cards, if you use the credit card enough you will be able to see the difference in your account balance at the end of the month.
The final benefit, but not the only, is the availability to use the pre-paid credit card when you travel. No longer do you have to get travelers checks when you have a vacation or go on a business trip. Pre-pay your card and use it for hotels, rental cars, and even vacation shopping. |
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