Prepaid Debit Cards

Debit cards are an excellent way to build or rebuild credit. A debit card is prepaid or tied to a banking account. The card can be used as an ATM card to get cash from the linked account or used as a credit card anywhere credit cards are accepted. When a prepaid debit card is used, it acts like a credit card and funds are withdrawn from the prepaid amount or bank account in a matter of days.

Because the debit card is linked to a bank account or prepaid, there is almost no risk that the bank will lose its money and there is no interest rate. Unlike a standard credit card, money must be available on the prepaid debit card or in the linked bank account to make a purchase. A prepaid debit card is one step removed from paying cash. You store cash on the card or in your bank account and use the card to access the money at any retailer that accepts credit cards.

Prepaid debit cards are suitable for everyone as they are more convenient than writing checks or paying cash for everyday purchases but also let those without solid credit practice using an instrument like a credit card to learn money management and overcome the obstacles not having a traditional credit card present.