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Is A Prepaid Credit Card A Credit Card?

by Samantha Bennet on 2013/12/03

Is A Prepaid Credit Card A Credit Card?

If you are a newbie to the world of credit cards and debit cards, you might be wondering – is a prepaid credit card a credit card? The answer to the question is - unlike a traditional credit card; a prepaid credit card does not give you credit, but allows you to only spend the money which you have loaded into it in advance.

However, prepaid cards are accepted everywhere that regular credit cards are accepted. So, you can use them to book a car, reserve a hotel room, book plane tickets or anything else you can do with regular credit cards.

Apply for a Prepaid Credit Card Below:

Millions of Americans rely on prepaid credit cards to manage their finances only because they can spend just what’s available and there is no risk of running into a debt.

Here are certain characteristics of a prepaid debit or credit card Vs. a credit card:

    •You need to pay fees to set up an account, and then you deposit money, do any transaction or simply check your balance. However, one thing that you can be sure about a prepaid credit card is that you will not have to pay interest charges as you are not borrowing money.

    •Comparing a prepaid credit card with a regular card you will know that your credit line would never exceed more than you can afford. Money is first put into your account before you make your purchases.

    •Evaluating a prepaid credit card with regular credit card will help you realize that a prepaid credit card allows you to stay within your budget especially when you are traveling when transaction fees are at its highest.

    •When doing a prepaid credit card versus credit card, a prepaid credit card is always a safer option for you to not run into a credit debt, but spend only what you can actually afford.

Is a prepaid credit card a credit card? Yes and no. It can be used just like a credit card, but without the interest charges and dangers of going into debt.

A prepaid credit card is always the best option for people who are running on low credit or have low income. Nevertheless, if you are a compulsive shopper, a prepaid credit card can be your best friend.

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