Most of us are familiar with the concept of credit cards but the term prepaid credit card does not sound all that familiar. The credit card has become almost a necessity today. People need it to buy things online or to make flight or railway reservation. So it is not uncommon to see people applying for a credit card. However, not everyone who applies for a credit card gets one. The credit card company has several criteria before issuing a credit card for the applicant. One such criterion is a good credit history. If a person who applies for a credit card does not have a good credit history, there is a high possibility that his application will be rejected. So one might wonder that having a bad credit history would mean that he or she will not be able to get a credit card. Well, there is a solution to this problem. The solution comes in the form of prepaid credit cards.
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Prepaid credit cards, as the very name suggests, is a card wherein the cash is paid beforehand. Having a prepaid credit card is almost like having a savings bank account where one deposits money. This deposited money can be withdrawn as and when the customer wishes. Similarly, using a prepaid credit card, one can use it to but things or make reservations and the appropriate amount of money will be deducted from the prepaid credit card account.
While making use of a prepaid credit card, you can enjoy almost all the benefits that you would be able to enjoy if you had a normal credit card. And the best part about a prepaid credit card is the fact that you will never be in debt unlike when you use a credit card as you will be spending only your money. Another advantage while making use of a prepaid credit card is the fact that you will have to pay no interest. It might sound too good to be true but that is indeed the advantage of having a prepaid credit card. It is almost like using a debit card that is tied up with your savings account.
However, to open a prepaid credit account, you will have to make an initial deposit of some money. And every time you deposit money into your prepaid account, you will have to pay a certain amount of money to the bank or the financial institution which has issued your prepaid credit card.
This might seem to be the only drawback of using a prepaid credit card.
In Canada, the concept of prepaid credit card is becoming very popular and a large number of banks and financial institutions are offering it to their customers. Capital One, which is head quartered at Toronto in Ontario, is known to have pioneered the mass marketing of credit cards in the early 1990’s when the concept of credit cards was relatively new and just gaining popularity. It is one of the companies in Canada which give prepaid credit cards to their customers.
