Credit Cards... how do the pre-paid ones work???

Question

i do not use credit cards or use a bank or checking account, nor do i ever want to start....but i would like to pay bills online or order stuff off of e-bay or pay for things over the telephone. Can i do these things with a pre-paid credit card??? how do the pre-paid credit cards work and how would i keep track of how much is on the card??? like if i wanted to order something that is 32.50 and i only have 25.00 on the card...how would that work?

kilroy...i get what you are saying....but lets say i am trying to order something off of e-bay....how would the computer or the e-bay account know that i am lacking the 7.50.....would it just automatically tell me that i dont have enough? thats what i dont understand.....i dont want to scam or cheat or get stuff for less than what its priced....i just dont understand how it works...

Answer 1

Ok here we go. you should definitely open a checking account. most banks offer it for free, with other perks like a free visa check card, free online bill pay and such. The account is truly free, they only make money if you don't have enough to cover a puchase. for example, you buy something that is 100 dollars but only have 70 in the account. you then get hit with a "insufficient funds fee" so as long as you are good, and only spend what you have, you should have no problems. As i was saying, most banks will give you a free debit or check card that bears the logo of visa or mastercard. this means you can use it anywhere visa or mastercard are accepted. You would usually deposit your paycheck and spend the money from there.

Regarding ebay, you can choose to open a paypal account that you can link your checking account (or other credit cards) to it so you can pay for purchases like that. most users will only accept paypal (because it's safe)

The prepaid credit cards, even though they are great for gifts, are not really credit cards, they do not report to any credit agency, they simply allow you to use them LIKE a credit card. Most of them are reloadable... but only through a checking account. you can keep track of the balance and puchases online at the issuing bank's website. Some charge you a "convenience fee." the other things is, they will only approve for the amount left on the card and not a penny more. for example, you get a card worth 50, you make your first purchase for 20 which leaves you with 30 left. if your second purchase is 31, it won't approve. you have to let the merchant know to only put 30 in the card and pay the rest with cash or check. of course this won't work online. for security reasons, the entire amount of a transaction had to be on a single card.

I really would advise you to get a normal credit card, if you have the disipline to make timely payments and only charge what you NEED, you would be doing yourself a favor. It's almost the only way to build credit. otherwise you won't be able to get a good rate on a home mortgage or a car loan because you won't have credit. It's sad but true, it is the digital age and paying bills with money orders just won't work, it will get harder and more time consuming as you get older and have more needs or more bills

I also would advise you to read "young fabulous and broke" by suze orman. It is a book just for young people like you who don't want to get credit cards because they are afraid to go into debt like thier friends did or don't want to be taken advantage of by a bank.

Answer 2

They work just like a pre paid phone card. You pick the desired amount that you want put on your card & when the amount is used up, in most cases, you can reload the card by adding another monetary amount. You should be able to call a number for a balance on the card if you aren't keeping track of the amount. If you are short cash when buying something, you'll know right away.

Answer 3

It would work like any other card.

If you dont have the funds for the amount they are trying to authorize, it would likely decline the whole purchase (it doesn't deduct a portion and tell you what you have left-- it just declines the card.)

I'm guessing you dont have a job if you dont have a bank account-- a bank account is sort of a nececssity in this day and age. If you had paychecks to deposit you could use a debit card LIKE a credit card but it is deducted from your bank account and you never actually go in debt.

Answer 4

A pre-paid credit card is like a debit card. You have so much money on your credit card predeposited, from which you can withdraw and purchase goods.

Example: On my card I have $25. I purchase $10 of goods. I can buy $15 more of goods.

Another example: On my card I have $25. I want to buy $32.50 of goods. Unless I have $7.50 in cash in addition to hand to the cashier, I cannot buy that item.

Answer 5

If your credit record is poor and cannot get a normal credit card, then a prepaid credit card is your best bet.

Though prepaid credit cards are accepted at any regular retailer that carries the credit card logo, they are not a ‘credit’ card in the normal terms, since the issuer does not extend you any credit facility. Instead your spending limit depends on the amount of money you carry on the credit card at any point of time.

After the amount on the card is exhausted, you can

Answer 6

You give the bank or credit union five hundred dollars and thats how much your limit is you pay on time in about a year you get your limit up good luck

Answer 7

Check out these websites:

http://www.accountnow.net/#

https://secure1.galileoprocessing.com/acct4/index.php?ls=vwp#getcard

These are stored-value Visa/Mastercards that give you the benefits of a checking account, but not the problems