Prepaid credit card is similar to a shell for the nut. It’s an empty account in which you transfer money by checks or from saving accounts. You create an account in the bank or other financial institution and receive a credit card without funds on it.
By loading money to the credit card, you increase your credit score. Furthermore, it has a positive influence on the credit reports.
There are no limits on the cards. You can use a prepaid card till all money will be withdrawn from the account. Though it includes monthly fees from the company, it also offers additional services such as cash back and bonus proposals.
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There are two substantial drawbacks of using prepaid credit cards. Firstly, there are certain additional fees such as monthly fees of a company and other fees that depend on transactions. Secondly, after you charge all funds from the card, you have to reload a credit card and pay a credit card company this way.
When it comes to small expenses such as grocery or café expenses, prepaid credit cards don’t charge fees or offer high discounts or cash backs. You can ask for a prepaid credit card in the well-known companies such as Visa or MasterCard.
Check our previous answer about student credit cards.