Credit cards are the most popular non-cash way to pay for goods and services. Unfortunately, these small plastic items can be difficult to obtain if you have no credit or less than perfect card. Credit cards can also carry high interest rates and put you in a difficult spot. Using a prepaid credit card, however, is the perfect alternative that gives you the ease and convenience of credit cards without any of the negative aspects associated with them.
How They Work
Before you can use the card, you must deposit or “load” money on to it. The method of deposit varies from one company to the next but typically include direct deposit. Once you have completed the task, you can then use the card like a traditional credit card until you have exhausted the funds. For example, if you deposit $100 on the card and use $25 on gas for your vehicle, you have $75 remaining. If you spend the entire amount, you can no longer use the card until more funds are added.
Benefits of Prepaid Cards
Prepaid cards have many benefits over traditional credit cards including not requiring a background check. This makes them ideal for students as well as people with no or bad credit. And since you can only spend the amount that is on the card, you won’t go into debt using them.
Choosing a Card
Not all prepaid cards are created equally and many of them have hidden fees that can take a bite out of your budget. While the Kaiku prepaid card has no monthly fee, this isn’t the norm for most companies. That is why it is important to read all the fine print before signing up.