Prepaid credit card - Advantages and disadvantages

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Prepaid credit cards are offering people with low incomes or poor credit ratings a chance to take advantage of a credit card. But what advantages and disadvantages do prepaid credit cards have?

A relatively new form of credit card you so-called pre paid credit card. This differs from other types of credit card because you only have funds available to it on the corresponding clearing account. You need a credit card that is similar to a prepaid phone card first with credit “charge”, then this means the credit card that will be. Basically, the prepaid credit card offers some advantages but also disadvantages for the users and cardholders. The biggest advantage of prepaid credit card is certainly that now customers can use credit cards, which are otherwise due to adverse credit no card in this way would receive. As one means of prepaid credit cards only through any existing credit and no credit claims, can even the holder of a current account balances, this type of credit card use. Since especially abroad and in the Internet is often the only credit card payment option is to have these “new” card of course great advantages of the prepaid credit card.

A second benefit to the cardholder is that it is an overview of the decisions made therein. While using a traditional credit card even once in the sum makes more orders than we had intended, does this by pre-paid credit cards from the outset to avoid, in which only the amount of money in the account, you also have a maximum wants. Since an “overdraft” in the sense of the credit card is not possible, which also provides the customer a security in addition if the prepaid credit card is stolen should turn the advantage to mention that the maximum in the account or located on the card balance has to be.Besides the many advantages there are also a major drawback of the prepaid credit card. While it is certainly positive for some customers is that you use the card only on credit can not see that a few other customers as a big disadvantage to. One is at the disposal of assets, and may take the prepaid credit card is not in the sense of spontaneous, or even for emergency use as you would with a conventional credit card with a certain amount limit is used. For unforeseen orders, the prepaid card is less likely and thus is less flexible than other credit

Those concerned with purchasing online using their credit card, will be increasingly relieved on the so-called prepaid credit cards coming from different financial institutions. But what is behind such an offer?

Prepaid credit cards are actually the same idea basically, almost every owner of a phone should know: The credit card will be charged before use with a certain amount of money charged, then the payments will be processed accordingly. The principle is strongly reminiscent of the method with traditional rechargeable debit cards, however, the advantage of prepaid credit cards in the much wider acceptance. Almost in every place where ordinary credit cards are accepted, you have the possibility to use a prepaid credit card.

Another big advantage compared to ordinary credit cards is the lack Schufa query before issuing the card. Since under the prepaid principle usually no payments can be made to the board on the amount may go, is the lack of polling also perfectly understandable. For many customers, which, because of problems Schufa the issue of a normal credit card is denied, provided by the prepaid card is a suitable alternative to the use of cashless payment. Even as the first credit card in adolescence is the prepaid card as an alternative to cash is certainly recommended.

The comparison of different providers of prepaid cards is very rewarding, since depending on the bank also offered additional benefits. Credit interest rates, an unlimited Aufladebetrag or even negotiating a credit line (if still missing Schufa query) are possible depending on the institution. The annual fee for a prepaid credit card is usually 30 to 50 euros.