The Rise of Prepaid Credit Cards

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I think prepaid cards are really going to take advantage of this credit crisis we are experiencing. Every time I turn around I keep hearing something about this credit card company going out of business or that card company lowering peoples' credit limit.
One thing that you mentioned in the article was about building credit by way of secured cards versus prepaid cards. While most prepaid cards don't help build credit, which makes sense because they want you to use their card and not a traditional credit card, I know you can build your credit history with the AccountNow prepaid card. Actually, you can do it two different ways:
1. You can use the free online bill pay to pay your monthly bills. When you pay your bills with their service, they will report your payment history to PRBC, a credit reporting agency.
2. You can use their iAdvance Line of Credit to get a short-term loan. When you repay the loan they will report your payment to the credit bureaus. I personally like this option better because you are demonstrating that you can pay back borrowed money, which is what credit is essentially.
References:
AccountNow website- http://www.accountnow.com
PRBC- http://www.prbc.com
iAdvance Line of Credit- http://www.myiadvance.com/

Tony of CA 2:19PM July 21, 2009

+1

soundtracks of AL 6:15AM July 17, 2009

Try Discover Prepaid by nFinanse. Their offering has the lowest rates vs. any Visa or Mastercard product I have compared it to. There is a $5.95 up front fee, no transaction fee for purchases, a $2.95 reload fee and a $2.95 fee if a balance is left on the card each month.

Rich of GA 11:46PM June 16, 2009

it was 9.99 to purchase the card amd then there is a monthly fee and a store fee. so i have the card that cost me 9.99 to get and now between the store fee and the monthly fee i've been billed roughly 7.00.store fee is 1.95 and monthly fee is 4.95...i want to find a card with less fees. does anyone know of such a card without all those fees?

david corbin of ME 7:14PM June 14, 2009

To give a better perspective on building credit with a prepaid credit card:
More prepaid credit cards are now offering free credit building programs as part of their online bill pay features. Basically, the way it works is every time you use online bill pay with your prepaid credit card to pay a bill, your payment history is reported to a credit reporting bureau.
These are great programs for consumers of these cards because most of the people who use these prepaid cards are often doing so because of credit problems. So, helping to improve their credit history is a useful feature for them. However, although the credit building program is often free, some card providers do charge a small fee to use their online bill pay.
One card that does offer free online bill pay (as well as free credit builder) is AccountNow (http://www.accountnow.com). AccountNow also provides customer with another method to build their credit, separate from the credit building program used through online bill pay.
With the AccountNow card, you can get a line of credit, which is basically a short-term loan. When you pay back the loan on time, your repayment is reported to major credit reporting bureaus. This method may have an advantage over the credit building program that AccountNow and other prepaid credit cards provide because you are showing that you can repay a loan, similar to repaying credit from a credit card charge.

Tony of CA 2:57PM June 03, 2009

Speaking from experience, I prefer prepaid to secured. You can still get in trouble with a secured credit card, because they usually carry more fees and interest charges.
I used a capital one prepaid card for a long time. It was the only method I've found to avoid being charged exorbitant fees to use my own money. It had almost no charges. You reloaded them at various locations, for a $2 fee, and then could use your card like a credit or debit card, anywhere regular CC's were taken. It had debit card -esque fees for ATM's,and if you used it at "point of sale" locations, there was no fee. Once I had a $0.28 balance for over a month, and saw no extra fees on my
For someone like me who's never been able to balance his own check book or avoid late penalties and interest charges with credit cards, it was a godsend.
My question is this: does anyone know of a really good prepaid card that I could switch to? Unfortunately, Capital One dropped the prepaid card line and I've gotten no info on a good low cost alternative. Walmart's prepaid card, for example, charges $3 to purchase one, $3 for month fees, and $3 to reload. That doesn't sound too bad at first. When I used them, however, the daily balance reporting was always off, leading to embarrassing moments. Lets just say there was a lag in reporting. :-)

Steve of FL 2:51PM February 20, 2009

I think a great alternative to credit cards is a fully functioning pre-paid debit card.
The best example I've found of this is the Black History Card (not without some irony given that it is Black History Month FEB). www.blackhistorycard.com
I say 'fully functioning' because the this debit card can truly function as your credit card, bank account, and transfer method of money from one person to the next.
It's back by Mastercard so you can use it as a credit card for online purchases, renting vehicles, and renting hotel suites.
It functions as a bank account given that you can put DIRECT DEPOSIT right on the card! You don't even have to worry going to a check cashing stop, although it is still possible to do that in the event you have two handfuls of cash! But unlike a bank or standard credit card you can't go over your limit or have late payments.
Stop those Banks and Creditors in their tracks!

Jay Lexington of MI 6:25PM February 05, 2009

At the core, the benefits of prepaid debit are simply:
- Access to card without any application. Unless you are on OFAC or do not have an ID, you can get it!
- Control of spending. This may be the main engine of growth in 2009 as people look for tools to manage their budgets more closely.
- Bank on the card without hassle. Most prepaid cards do not require customer to maintain a minimum balance or let you go overdraft and experience the world of exhorbitant fees. Yet, they provide the basic banking needs people want, including access to payment networks, online shopping, FDIC insurance, fraud protection, and some even offer savings accounts with great savings rates.

Rene Gonzalez of TX 10:42AM February 02, 2009

Gift cards at retailers aren't as good a deal as they used to be, thanks to the prospect of bankruptcy hanging over many retailers. If you still have gift cards when they go under, you are out of luck.
How does this factor into prepaid & secured credit cards? More bank failures are expected during 2009, so what are the repercussions for prepaid cardholders when a bank fails? $500 may not be much to some people, but for others it is close to a month of wages. Are these prepaid amounts FDIC backed or in some other way secured?

Stuart of AR 10:13AM February 02, 2009

Great summary - I still recommend debit, even though it doesn't build credit history, but for those starting or rebuilding, either is better than credit!

THowell# of TX 9:09AM January 31, 2009