Joseph Kenny asked:




It can be pretty tough when your credit is bad and it is next to impossible to get credit when you need it. Most major credit card companies will not talk to you, and a lender – well, forget about it. There is a way, though, out of the tough situation with a prepaid credit card. Here is what you can do with a prepaid credit card to help rebuild your credit score.

Need A Bad Credit Rating

One of the best things about a prepaid credit card is that it was designed for people with bad credit. In fact, that is one of the qualifications. There will not be any check on your credit rating, or your employment. Anyone can get one of these credit cards, but you will need to deposit a cash amount equal to the credit limit you want. This lets you know that it operates on a debit basis – no actual credit is given.

Get A Card That Reports To A Credit Bureau

Not many prepaid credit cards actually report to a credit bureau. That is, however, the kind of card that you want to get. While others make having cash handy, it really will not help you (or anyone with bad credit) in the long run.

Watch The Fees

Prepaid credit cards often come with a number of fees. You should compare one card with another in order to get the fewest fees. In order to get a prepaid credit card that reports to a credit bureau, you will probably have to pay an annual fee – could be as high as $100.

Look For Benefits

Most prepaid cards do not come with any benefits, but some do. You can get points, like on a regular credit card, that are useable for a few benefits – like free phone time, and more.

No Credit Card Abuse

Another good thing about these credit cards is that you can never go over your limit, or have to pay any late fees or interest. (Hey, this is sounding better all the time). This means that if it reports to a credit bureau, that it would be impossible to get a lower score than what you may already have with this kind of card.

Easily Put Cash On Your Card

Most prepaid cards will allow you to easily put credit on it from just about anywhere. You can even put your paycheck onto it by Direct Deposit.

Use It Like A Credit Card

A number of these prepaid credit cards can be used in the same way as a credit card. You can set up automatic bill payments, purchase things online, or over the phone. If you want this feature, however, be sure that the ad says that you can do this.

Like any other credit card, you will want to compare features and fees in order to find the best prepaid credit card for your needs. While most of them are similar, the fees vary widely. Since no qualifications are needed, why not get the best?

Mathew

David M. Pratt asked:




Are you looking for a prepaid card that reports to a credit bureau? The short answer is that most prepid cards do not help you improve your credit. That’s because prepaid cards are not credit cards, and thus they do not extend credit to you. No credit, no credit bureau tie in.

However, there are are some cards that offer a credit reporting feature. Called the iAdvance Line of Credit by MetaBank, this is essentially a way to take out loans on a prepaid card account that when paid back get reported to one or more of the three major credit bureaus: Experian, TransUnion, or Equifax.

What Is a Prepaid Card?

First know how prepaid cards work. They are stand alone cards that look and act like a checking account debit card. They carry the Visa or MasterCard logo (typically) and run on the same debit card networks. They have an embossed 16-digit number on the front. This is your card’s account. They have a magnetic strip on the back for card swipe machines to read your card account number. And they have a security code and signature line on the back as well. Unlike traditional debit cards (also known as check cards) prepaid cards are debit cards that are not attached to a checking or savings account.

You simply apply for a prepaid card from any number of prepaid card companies–such as MiCash MasterCard. There are no credit checks. You just have to verify your identity by providing your social security number and birth date (as required under the U.S. Patriot act to avoid terrorists or other criminals from obtaining a card). To use the card, you must “load” your card with money. You can do this through direct deposit, or through reloading networks. (See which networks apply to your prepaid card).

After you do that, you can use the card for purchases, and for each purchase, the purchase amount is deducted from your card’s balance. When you reach zero dollars, you either need to put more money onto your card or it will become inactive. With prepaid cards, you’ll pay either a monthly fee or a per-transaction fee (usually a dollar a transaction). So while these cards aren’t free, for the unbanked (people who can’t get a credit card or a checking account) they are an excellent alternative.

More About iAdvance

Here’s how iAdvance works. You go to the iadvance website and sign up using your card account. You have to have direct deposit set upon your card as well. With the MiCash Card, you simply download a direct deposit form and, fill it out with your card’s account number, and hand it in to your employer’s payroll department.

Once you have set up direct deposit, you contact iAdvance online or by phone and take out a loan against your card balance (up to 50% of your balance). iAdvance does not recommend treating this program like a payday loan, and limits the number of iAdvances you can take out in a given calendar year.

Rather, it is meant for you to take out small loans–even as small as $20, which will then be automatically paid back the next time you have a direct deposit. This loan transaction and the fact that you paid it back on time (which happened automatically provided you didn’t cancel direct deposit in the interim) is reported to one or more of the three major credit bureaus.

Over time, you will build up a history through iAdvance of paying loans back on time. This should help with your credit score, althought iAdvance makes no claims that it will.

Not a Credit Card

So, even though you don’t have a credit card, this is a good method for generating some “credit” that will wind up in your credit report. Another method is to pay bills, although bear in mind that most bill pay programs do not report to the major credit bureaus and hence, their value is minimal.

Leonard

Jen. E asked:


credit cards that are specially for people with bad credit? What about the prepaid ones? Most of the cards I’ve seen so far only report to ONE credit bureau. Is that okay? Or should I find one that reports to all three? Or should I wait till my credit is good enough for a real credit card so I can help rebuild my credit? I really hate credit cards, but I am responsible enough. I just need some advice on this. I want to get all the info I can abot rebuilding my credit. Funny thing some other person responded to my other question by saying i shouldnt worry about my credit. Ok CRAZY. If you ever want to get a house, or a new car, or if money gets tight and you need a loan, or a business loan, what do you think they check? Credit DUHHH. LOL

Brett