Prepaid Credit Cards

Prepaid credit cards are more like a gift card than an actual credit card. The difference between a prepaid credit card and a gift card is actually only the issuing company. A gift card offered by a retailer can only be redeemed at that retail establishment. But a gift card offered by Visa or MasterCard can be used anywhere those credit cards are accepted.

Credit cards that are prepaid make excellent gifts as they offer greater variety than other gift cards. Many individuals are also turning to prepaid cards in lieu of traveler's checks or standard credit cards on trips, especially overseas, or when a credit card is required for reservations or purchases.

To use a prepaid credit card for any purpose, you simply buy the card in a participating location, pay in advance for the balance on the card, and then use the card until the balance is depleted. This can be useful for hotels, car reservations, and meals and entertainment or any other purchase that is simpler using a credit card rather than cash. Prepaid cards are not based on your credit score nor will their use affect your credit record in any way.