With prepaid cards, you spend your own money as opposed to money lent from a bank. Although prepaid cards might carry the Visa, Mastercard, Discover or American Express logo, they are vastly different from traditional credit or debit cards because they are not connected to any bank account and you don’t have to borrow money from the bank in the form of credit. You are spending your money, not a bank’s.
It is best to get a prepaid credit card instead of a store card because not only are you paying ahead of your purchases, you won’t be charged the higher interest rate of a store card. Every time you use your card, it reduced the amount of cash you have on the card. Some prepaid cards can be used at an ATM, but you will only be able to withdraw the amount of money you have on your card. They offer a way to use your money without carrying around a wallet full of cash.
Now there is a new rule went into effect from the Consumer Financial Protection Bureau that gives prepaid cardholders some of the same protections that debit cardholders have.
Some cards can be reloaded many times while others are only reloadable once. Make sure you read the fine print on the packaging to determine this.
Credit cards can be a valuable asset, when used correctly. Freedom to Dream Financial are experts at helping you maximize your resources. Contact us today. We can help!