Understanding the uses of prepaid Credit Cards
Technically you may not use the term credit card in respect of the prepaid credit cards. The cards however are used like the credit cards and hence the name. It is somewhat similar to the prepaid cards used by you in cell phones. You pay a predetermined amount and in exchange derive some predetermined services. The advantage of this type of card is that they are accepted as credit cards everywhere and there are no charges on them. You can avoid getting more and more in to debt unlike the credit cards when you use the prepaid credit cards. The debt is avoided because all the purchases have been paid before you procure the products or services.
It is you who determine the desired credit line with such prepaid credit cards. The credit line on such cards is the limit that is set up on the quantum of money transferred by you to your credit card. It is therefore convenient to make your budgeting and plan your expenses which may not be as easy with post paid credit cards where you may buy on impulse thinking that the amount is to be paid at a later date. Moreover the prepaid credit cards are not even low interest credit cards but they are in fact no interest credit cards. However, though there are no finance charges yet there could be other charges like monthly fees, start up application fees, over limit fees and ATM fees.