Do those pre-paid credit cards really help you build your credit?

Question

Do they help you establish credit? I'm 20, and in the past two years I havent been able to get a credit card because I have no credit (which is something that I really dont understand, but thats not the point) would one of these help me?

Also, if they do help you establish credit, how long after getting a pre-paid card should I wait to apply for a real credit card?

ok ok ok...so if they dont help you establish credit....how do I establish credit if i cant get a credit card?

thanks lilise...but I got denied for the capital one "we give this card to anyone" card. I've applied for every card under the sun that is offered to people with poor or no credit. I cant get a single one.

Answer 1

See if you can have someone add you as an authorized user to their cards. (maybe someone in your family) Be sure that the card(s) they add you to have an excellent history and low utilization.

Doing that should raise your scores. If you are added as an AU, wait for it to start reporting before you start applying again.

Unfortunately, if you have been constantly applying, your scores have dropped lower due to the inquiries. It usually takes about 6 months for an inq to have less effect on your scores.

You might look at getting a secured card. Depending on where you get the secured card, it should unsecure in about 9 - 12 months. As long as you have a good history on it.

You might do the card selectors on Bank of America, HSBC and Orchard Bank sites. The selectors will not pull a hard inq (only soft's) unless you actually apply for a card, then they will pull a hard.

Keep in mind that even if a card is recommended to you that it does not insure you will actually be approved for the card.

Answer 2

Most prepaid credit cards do not report your payments to credit bureaus.

But there are some prepaid credit cards with a "creditbuilder" service. It is a service whereby the cardholder pays a monthly fee to "creditbuilder" , which is reported to the credit bureaus as an interest payment. As long these payments are made on time, (most prepaid cards will require automatic deductions from checking account), you should be able to build a credit history with a prepaid credit card. You should be able to establish a credit history within a year.

Having said that, you are probably better of getting an unsecured or even a secured credit card. This is because, the fee that you pay for the "creditbuilder" comes out of your pocket (not for any purchases you put on the card).

Hence, if build or rebuild your credit, the most cost effective way is to get a secured credit card. Orchard Bank Mastercard (as suggested by many who have answered your question is a good choice). However, if you wish to get a prepaid credit card, make sure it has a "creditbuilder" service.

Answer 3

No, they do not help establish credit. They give you a way to use a Visa or Mastercard in a society where it becomes increasingly difficult to live without one.

They do not establish credit because no credit is given. You prepay your account and then you have that amount of money to use. The correct term for this is a DEBIT card.

To establish CREDIT, you need a CREDIT card. Bank of America offers a secure credit card where you put down $99 into a savings account and you get a credit card with a $500 limit on it. If you make payments on time every month for a year, you get your $99 back and the card becomes an unsecured (regular) credit card. B of A will report your payment history to the credit bureau monthly and this will help you get credit.

Answer 4

Before u apply for a prepaid credit card, do me a favor apply for a CC from Orchard Bank. Their rates are kind of high, but the trick is to use it and not keep a balance. I know of several instances where someone has been granted a bankruptcy and they still get a card a few months after the bankruptcy. They will give u a line for about $500. After u get this card wait six months and apply for a Washington Mutual CC. They have on their website a credit score check for your"FICO" number. This FICO score will determine your credit worthiness. Even automobile insurance companies check this score and charge the customer based on your FICO score.

Answer 5

no the fact that they are secured makes that a lie go and buy something on credit like a cheap car from a lot dont use it unless you have too then sale it after a week and still pay the note on time you dont have a bad cheap car someone else does but youve got a good record of payments and then get a regular bank card from your bank as a result of the payments on the car then use it a few times and keep it at about 100 or something amonth and pay it on time now gfo to a credit reporting co or credit co and jhave your score raised now you continue til you can buy a house

Answer 6

Though prepaid credit cards resemble debit credit cards a lot, the two are vastly different. When you use debit cards for any purchase, your shopping will be automatically debited from your bank account. On other hand, the purchases made with prepaid cards are deducted from the balance present on the card. The prepaid cards offer various benefits like: Interest-free purchases People with a bad credit history are eligible to apply for a credit card. The credit limit varies according to the balance available on the card.

Answer 7

Pre-paid cards don't really do that much. A better idea is to get on a larger loan, such as an auto loan. Even if you need someone to co-sign for you, it will help. Other ways to help include getting a secured card. Stay away from cards that charge a start-up fee or an annual fee or a maintenance fee.

Answer 8

I don't know about the pre-paid card. I do know about Providian and Orchard Bank can help people who have poor credits. As long you pay the monthly bill on time you are building your credit.


LC

Answer 9

Pre-paid doesn't affect your credit at all, to get them or use them. They are generally for the people with bad credit that can't get regular credit cards. Keep shopping for a company that will give you a card, I eventually found one when I was your age.

Answer 10

here is a tip i learned from someone hun, the more cards you apply for the more your credit score goes down, strange as it seems...the more hits to your name the lower it seems to be....stupidity i know, but i am still paying for getiing a zellers card years ago, i paid it off in full but all i can get now is my sears card, and no visa will give me one, even though i sold my house and i had the capital...really stupid system....yet i got the zellers card when i was on welfare, and when i was working they denied me...what the hell sense does it really make....lol;