Are we witnessing the end of the credit card? Credit cards have become cheaper and more accessible than ever and they have also become increasingly popular over recent years, particularly in the recent recession when a lot of people struggled to get credit.
And yet, more and more people are recognizing the problems of a payment tool that remains susceptible to fraud, theft and piling up debt. Which is why debt charities, consumer organizations and experts alike have begun recommending prepaid cards as a safer alternative to the traditional credit card.
If you know where to look you can get the best prepaid credit card terms and conditions available.
Credit cards: Who are they for exactly?
Admittedly, the popularity of prepaid cards was initially the result of banks making it much harder to apply for a credit card. To qualify for a credit card today, you will ordinarily have to have a good credit score, which can take a number of years to build up. If you have defaulted on a payment, even if it wasn’t your fault, you will have a black mark against your name and this will be shown in your credit history report.
Credit card companies like to see someone who is in stable employment, has lived at a stable address for a number of years, has a good income, has never defaulted on a credit repayment and who has had a bank account for years rather than months. This rules out the majority of potential customers from the outset.
Prepaid Cards: Building up your credit score
Of course, there are lots of people who have this kind of credit history. But there are also a lot of people who, thanks to redundancy or having never had a credit card before, struggle to qualify. For these people it is good to know that not only can they build up a credit score if they know what to do but there are prepaid credit cards.
These are cards that are pre-loaded with money, when someone spends something the total is reduced by the amount of money they have spent. This is not really a credit card as such – as you will not be able to get credit – but it does mean that you don’t have to carry money, can pay internationally and own a card that works almost exactly like a combination of debit and credit card.
After all, a prepaid card allows you to withdraw cash from ATMs around the globe and to discretely purchase online. As such, a prepaid card is safer than a credit card, while sharing some of its most fundamental benefits. This is why increasingly more people are choosing a prepaid card over a credit card.
Which prepaid card should you choose?
There are a plethora of prepaid cards available for a variety of situations and preferences. There are, for example, specialized prepaid cards available for travel money. These are cards that are preloaded with money and spent abroad, reducing the risk of losing money.
If the worst happened and you lost your card, the issuing bank would send you another one to wherever you happen to be, or to your home address. Friends and family are usually also able to top up your account in case of an emergency as well. There are also prepaid cards for under eighteens as well as prepaid cards that can help improve your credit rating.
When deciding which prepaid card to go for, inform yourself about the topic in general first, before comparing cards in detail. This will allow you to understand what you’re really looking for. After you’ve selected your key areas of interest, you will be able to find a list of all the advantages and disadvantages of the prepaid cards online.
There are money comparison sites which feature prepaid cards as well as dedicated Internet sites which explain in great detail everything you will need to know to make sure you get the best prepaid card for your circumstances.
The credit card may yet survive for a few years, albeit foremost for wealthier customers wanting quick and easy credit. In terms of safe and discrete payment, meanwhile, the prepaid card has long turned into the preferable solution. Make sure you find the one that’s right for you.
About the author: This article was provided by Tuxedo Money, a leader in the field of prepaid solutions.