Advantages And Disadvantages Of Prepaid Credit Cards

If you’re a frequent traveler you probably know how funny money can get, especially when you’re dealing with international money exchanges. Now many travelers are beginning to use prepaid credit cards to finance their travel spending – which can prove to be good or not so good.

Advantages

• No background check
• No income requirement – you just load the card with what you can afford
• No credit check
• Prepaid credit cards are widely accepted nationally as well as internationally and they look like typical credit cards
• Because these cards are widely accepted they’re also available for purchase in many locations
• If you have a bad credit history this can be a great option
• Prepaid credit cards help you avoid debt, since you can only spend what is available on your account
• It’s a good tool to help you and your teenagers manage money and responsibility

Disadvantages

• Purchasers must have the cash up front
• Prepaid credit cards cannot be used for automatic monthly billing charges or payments
• Set-up fees are required and do vary
• Keeping track of account spending is manual and can be troublesome

For the traveler, having a prepaid credit card can be a great alternative to travelers’ checks. If you are traveling internationally, a prepaid credit card can help you avoid complicated exchange rates. Prepaid credit cards also come in handy for those who do not have a national or international bank. If this is you, ATM machines are still an option and will allow you to pull out cash for your use. If your card balance is low or you run out of money, you can simply reload it. However, for security purposes it is recommended that you make only small deposits on your card, in case it ever gets stolen.