For many people, having a credit card is a necessity to live and operate in our world. Unfortunately, these cards come with many disadvantages, such as high interest rates and security concerns. Luckily, through the use of prepaid credit cards, many of these disadvantages can be avoided.
Prepaid Credit Cards Build Credit
The first reason why a person should use prepaid credit cards is to build credit. Like all forms of credit, successfully making payments each month will help you will build and improve your credit history over time. With prepaid credit cards, since your balance will have been funded previously, you payment will always be on time and you can build credit immediately.
Prepaid Credit Cards May Avoid High Interest Situations
The second reason why a person should use a prepaid credit card is to avoid paying high interest charges. Normal credit cards come with very high interest rates, which can be over 25%. With a pre-paid credit card, you will avoid having to pay these excessive interest rates.
Prepaid Credit Cards May Avoid Building Additional Debt
The third reason why a person should use a prepaid credit card is to avoid building credit card debt. Credit card debt is financially devastating for millions of people. By using cards that are paid in advance, you could avoid accumulating an insurmountable amount of debt.
Prepaid Credit Card Rewards Programs
The fourth reason why a person should use a prepaid credit card is to earn rewards. Almost all credit cards come with the ability to earn rewards such as cash back or airline miles. Some prepaid cards also come with this benefit.
Prepaid Credit Card Security Features
The fifth reason why a person should use a prepaid credit card is to enhance security. When using a typical credit card for online purchases, information about your accounts can be obtained by illegal hackers. Prepaid cards do not contain as much personal information, so using them can be far more secure than using traditional cards.
Money 411 is a FREE personal finance resource, sponsored by AccountNow. For more information on prepaid credit cards and other alternative banking tips, visit Money 411 at www.accountnow.com.
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