Use a Prepaid Credit Card to Rebuild Your Credit

If your credit score has hit rock bottom, you can forget about getting a regular credit card and usually no lender will touch you either. This can seem very frustrating, especially if your low score was the result of something beyond your control. Don’t give up hope though. There is a new generation of cards that are available to help people in your situation.

Prepaid credit cards are a fairly new concept, but are gaining popularity quickly. It seems like you need a card for most anything nowadays, from airline tickets to hotel reservations. It’s much easier to pay your bills online or over the phone with one as well. This type of card can help you do just that and more.

This is how it works. You decide what limit you want on your account. You deposit that much money. Now you have a credit card with your name on it and money available. They work just like any other bank card. They can be considered either a debit or a credit card.

Now there are some things you need to consider when you are looking for this type of account. First, be sure the company reports the deposits and such to the credit bureaus. This can cost you a few pennies, but it will slowly help to improve your credit. Secondly, be sure you know the total amount of the fees involved. Most of these cards will charge you open the account, to add money, to use an ATM, and to make certain purchases online. Be sure you are aware of all these or you may find your deposit is quickly gone.

You can find cards that will also offer you various things, such as cash to take surverys, or even cash to upgrade to a card with a higher limit. Many of these types of cards will set a certain amount that is available to you per day. This can really be a pain if you quickly need more than is allowed. Some of the gold and platimun cards may not charge anything for you to upgrade to, and may waive the monthly fee if you deposit so much onto the card each month.

You won’t ever have to worry about going over the limit on this type of card either. Your limit is the amount you deposited, minus any fees. This can end up saving you a lot, since you won’t be penalized for going over. These types of cards are very easy to use and it’s also easy to get the account set up. Most companies offer you the choice of doing it online or over the phone. You can also buy packets at some stores and add the money to your account right at the checkout.

Take the time to research each one and know what the advantages and disadvantages are. This will save you some money later on and you will be on your way to improving your score.

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