What is a prepaid credit card?

by Manshu on September 3, 2008

in Articles

Prepaid credit card by definition can’t exist because the whole concept of a credit card is that you spend first and pay later. Anything where you have to pay first and spend later can’t be called a credit card at all.

However there are certain type of cards that are funded by you first and then you start spending on them. Such cards are known as pre-paid credit cards.

More than credit cards they resemble debit cards and are offerred by big companies like Walmart. They have really high fees for everything and should not be used by anyone who can get a regular debit card by opening a checking account with a bank.

If you must use a prepaid card then use the Walmart money card because that has got the lowest fee among all other cards of similar nature.  Before getting such a card though try and get a debit card by opening an account in a bank or a credit union.

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