Credit-Cards Tips

Prepaid debit cards and prepaid credit cards

Don't get confused if someone calls your prepaid credit card a prepaid debit card. These are two terms for the same thing. Each card is backed by your money so neither constitutes a line of credit.

No interest charges or late fees with a prepaid credit card

Stop worrying about late fees and interest payments when you get a pay as you go credit card. Because these prepaid credit cards are preloaded with money, your purchase amounts are deducted from the balance, meaning you aren't borrowing money and aren't required to pay interest.

That doesn't mean that prepaid credit cards are free though. You may have to pay other fees to maintain the card such as application fees and opening balance fees. Check with the individual prepaid credit card companies to find out what their policies are.

How to shop for a prepaid credit card

When shopping for a prepaid credit card, compare setup fees and payment methods to find one that will work well for you. Setup fees can vary by over $100 so it's in your best interest to look around for the best deal. Also pay attention to any maintenance or re-load fees that may be associated with your pre paid credit card. Different pre paid credit cards will allow you to upload money through bank transfer, check, money order or even direct deposit from your paycheck.

Prepaid credit cards

If bad credit makes qualifying for a credit card unlikely, look into the new prepaid credit cards. These pay as you go cards work much like prepaid cell phones or long distance cards. You deposit money into your prepaid credit card account and then use the card like any other credit card. Purchase amounts are automatically deducted from your balance. Prepaid credit cards look like any other credit card but don't have the fees attached to them. They are a great option for people who want the convenience of a major credit card, but don't have the credit to qualify for one.

Preventing credit card fraud and stolen identity

Take every precaution you can to prevent information credit card fraud.

Guard your social security number carefully to avoid becoming the victim of information credit card fraud. Any document containing your social security number should be shredded after you are done with it. Never give your social security or credit card numbers to anyone over the phone unless you have initiated the call and can be sure that you know who you are dealing with.

Additionally, don't carry any more credit cards or identification cards with you than you need at one time. Keep photocopies of all credit cards, gym membership cards and identification cards in a safe place for easy reporting in case your wallet or purse is stolen.

Look into subscribing to a credit monitoring service. This service alerts you every time something new is posted to your credit report. This way you can swiftly react to any suspicion of credit card fraud.