Thứ Năm, 22 tháng 8, 2013

The Pros and Cons of Prepaid Credit Cards

The Pros and Cons of Prepaid Credit Cards


Most people agree that credit cards definitely help them in a lot of ways. Ever since the introduction of the technology of this plastic money, more and more people want to apply for a credit card. With only a plastic card, you can have different opportunities on the things and items that you want to purchase in the market. Even if you do not have a lot of cash at hand, you can simply use your credit card to buy the things that you want. Moreover, since you do not have to carry a lot of cash all the time, it also saves you from possible robbery in the streets.

Advantages Of A Credit Card


Having a credit card at hand is indeed advantageous; however it also has its downsides. A credit card is truly a big responsibility especially if you are only starting on building up your finances. Since credit cards give you the chance to buy now and pay later, it gives you a sense of assurance that you are financially stable today. However, as you purchase more items, so does your debt accumulate. It means that after the purchase, you then have to deal with credit card bills that may tell you have already spent the maximum restraint on your credit card and that you have to pay on the given deadline. But what if you cannot afford to pay on time?

Prepaid Credit Cards As An Alternative


While credit cards may be a great tool for purchasing, another type of credit card, the prepaid credit card also works wonders. A prepaid credit card works just like a normal credit card but the difference lies with the payments that you are giving. This type of credit card already has a preliminary balance within it, so if you want to use it to purchase something, the value of the item will be simply deducted for your current account. This gives you a lot of benefits since unlike credit cards, you can absolutely track the deductions that are happening in your prepaid credit card. Furthermore, you can see just how much money you are spending each day, and thus giving you an opportunity to properly plan and budget your finances.

Pros Of A Prepaid Credit Card


In addition, since you are aware of your balance, the only money that you can spend, then you are aware that any unnecessary spending will give you a tremendous deduction in your account. This type of credit card truly works for anyone who is too afraid of taking the risk of owning a credit card. Also, this type of credit card is great for people who want to budget their money well.

Cons Of A Prepaid Credit Card


However, there are also cons with having a prepaid credit card. Having such a card means that you have deposited a certain amount of money to your account so that you can spend it later on. But the problem will rise if you have no possible resources to deposit to your account, thus making your prepaid credit card temporarily halted. To prevent such a thing from happening, you have to make sure that you plan very carefully your finances so that a certain percentage can be allotted for your credit card. As long as you are being thrifty with your decisions, then your prepaid credit card will definitely work great for you.

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