A Prepaid credit card is a great alternative to a bank account. They were designed for individuals with damaged or no credit history.
Prepaid credit cards work like this; you make a deposit on your card/account. Then you use your card to make purchases. The funds are then withdrawn from your account.
You can deposit funds by a variety of methods including money gram, western union, and direct deposit. Using direct deposit you can save hundreds of dollars on check cashing fees. It is free to sign up and use direct deposit.
Many cards also offer Bill Pay. This will allow you to use your card just like a checking account. You can write physical checks to pay bills such as your cable, utilities, rent, you can also write a check to an individual. This can save you money because you will no longer need to pay for money orders.
If you need cash prepaid cards can be used at ATM’s. With a prepaid credit card you will never have to pay interest rates or overdraft fees again.
It is common for prepaid cards to come with another free service called credit builder. Credit builder will keep a record of your bills paid through bill pay and will report these payments to a credit reporting agency. This can be used to show credit worthiness to future lenders.
Prepaid credit cards are also issued with a mastercard or visa logo. So you can use your card to make purchases everywhere a visa or mastercard is accepted, including online and over the phone. Your card will not say it is a prepaid credit card and will look just like any visa or mastercard.
Prepaid credit cards approve everyone. There is no credit check or chexsystems verification. Thus you will be approved no matter your credit history.
In sum, these cards are much safer than carrying cash and are used just like any credit card. They also can function just like a checking account and approve everyone.