Credit Card Watch

Have you ever used a credit card? If you have, there may have been several different outcomes. One possibility was that you were very responsible. You used the card for all of your expenses so that you could get the rewards your card offered. You never bought anything you didn’t really need because you knew whether you could afford it or not. Every month you get a bill and you pay it in full. You reap the benefits of your reward program month in and month out because by paying off your balance, you owe no interest. You’ve built your credit history up to an exceptional rating of ‘excellent’ and feel confident that you could get a loan whenever you need it.

Another possible response has a very different outcome. You too use your credit card for everything because you want the cash back or rewards points. One huge difference is that you use your card for everything including things you don’t need which often are things you can’t afford. Whatever you see that you want, you buy. You charge to your card left and right just thinking about all the rewards you will get. Come bill time, you realize you don’t have nearly enough to pay your bill and end up just paying the minimum. The money you don’t pay then begins to collect interest and the amount you owe grows faster than you can handle. Your debt skyrockets and your credit score drops fast. You’ve gotten yourself into a huge mess.

If you are the first person, I would like to congratulate you. You know how to use credit cards to get the most benefit for you. If you are the latter person, you do need some help. Until you get your credit history up, you really can’t have a card. This can cause a lot of problems for some people. It will probably keep you from ever buying things on the internet because you don’t have a credit card, and it forces you to carry cash all the time, even in large amounts, Read the rest of this entry »

Perhaps the first thing to be said is that a prepaid credit card is something of a misnomer. If something has been prepaid, then it is not strictly speaking, of course, a “credit” transaction. But the name has caught on because prepaid “credit” cards can be used - for most intents and purposes - just like a standard credit card.

The principle behind the prepaid credit card is rather akin to the - now old-fashioned - idea of a book or record token, or a prepaid phone card. In other words, a payment is made in advance against an anticipated future purchase and, provided there are sufficient funds represented by the token or the prepaid card, the transaction can proceed without the need for any cash payment at the time of the purchase.

Prepayment is made by “loading” the card with cash paid in at the Post Office, a bank, a PayPoint or Payzone till. This can be made through an employer, a transfer through a bank, or by using a standard credit card. The prepaid card is then ready to be used in just the same way as a normal credit card would be used.

To complete a purchase, you will need to key in a PIN number at the shop counter and the amount of the transaction is deducted straight away from the balance on the card. The prepaid card can be used in the same way for shopping online.

There are a number of benefits to using a prepaid credit card:

Perhaps the most important is the control it exercises over spending. Since all purchases are prepaid, it means that you are accumulating no debts through its use and spending is limited to however much has been pre-loaded onto the card:

It can be a good way of controlling a child’s spending, for example, with a monthly statement of how the money has been spent;

Carrying a pre-paid card is also somewhat more convenient and safer to carry than cash;

For similar reas Read the rest of this entry »