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Prepaid Visa Consolidate Credit Card Debt

Pros and Cons of Prepaid Credit Cards By D. Laverne O'Neal, eHow Contributor

Found This Helpful Pros and Cons of Prepaid Credit Cards thumbnail

A prepaid credit card is actually a debit card. You deposit a certain amount of money into the card account, and when you make a purchase, the balance is reduced by the amount of the purchase. Prepaid debit cards are accepted by merchants as credit cards, and are commonly marketed to people who want to build or rebuild credit. They also suit those who fear charging to a credit card more than they can repay.

  1. Widespread Acceptance

    • Prepaid debit cards are convenient when you travel.

      Because prepaid debit cards display the logo of Visa or MasterCard, they are accepted by merchants who accept Visa and MasterCard credit cards. This broad acceptance can prove most convenient, especially if you travel. Using checks, the other common cash alternative, can prove problematic. Some retailers and eateries do not accept even local personal checks. Once you leave your city, you can really run into trouble, because nonlocal and out-of-state checks are rejected by large numbers of merchants. Another cash alternative, traveler's checks are not universally accepted either. If your credit does not allow you to acquire a true credit card and you do not want to carry lots of cash, a prepaid debit card can be a good solution.

    Not Debt

    • Using a prepaid debit card will not add to personal debt.

      Since you can only spend as much as you have deposited into your prepaid debit card account, it is impossible to accumulate debt with the card. This makes the prepaid card an excellent tool for those who fear they will be reckless with credit. In addition, since you do not have to pay interest on such a card, you run no risk of paying more for an item over time than the retail price.

    Embarrassment

    • The faces of some prepaid debit cards denote by word or symbol that the card is prepaid. Your prepaid card may prompt some friends and merchants to assume your credit record will not allow you to acquire a credit card. Thus, the prepaid card may cause salesclerks, waiters, or materialistic acquaintances to look at you with suspicion. Despite the fact that so many Americans do not have glowing credit, a social stigma still attaches to having poor credit. If the opinions of others do not faze you, so much the better. But if you worry over your social standing or reputation, you might hesitate to wield a prepaid card.

    D. Laverne O'Neal

    D. Laverne O'Neal, an Ivy League graduate, published her first article in 1997. A former theater, dance and music critic for such publications as the "Oakland Tribune" and Gannett Newspapers, she started her Web-writing career during the dot-com heyday. O'Neal also translates and edits French and Spanish. Her strongest interests are the performing arts, design, food, health, personal finance and personal growth.

    Original article published on eHow.com

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