By: Zongorazik Lassan
One of the major problems people face nowadays is the fact that they pay only the minimum back monthly on their credit card debt. This is why a lot of individuals simply can no longer pay all their monthly bills and have a lot of debt accumulated. This is where a pre-paid card will help and where a regular credit card fails to deliver.
The pre-paid card means that there is no credit check needed as there is no current credit facility on it. So people can now put money on their cards. Usually these cards are used by folks who have bad credit and they need to somehow manage their personal budget and finances better.
So if you are a person who is only paying the minimum monthly payment on your CC debt, this type of card is for you. This is because now you will be able to only spend the money that you actually have, rather than going deeper in more debt.
When you have a regular credit card, you will use it to pay any emergency bills. However you can use your pre-paid card to also pay your bills. All you need is to pay a bit of money every week to this card and you will soon have enough to use it for monthly bill payments. You should know that there is a small charge on the money that you put on your card, however it is not that much and it beats racking up on debt on your regular card month after month.
So if you have a bad credit rating, this one is definitely for you. If you try to use a regular CC while you are in a bad standing with your credit, your APR can go up to 35% and more, which will definitely create debt problems in the long run.
Try to treat your pre-paid CC as a means to pay off your debt, to pay for your goods and services employed while you have enough money on it. The seduction of purchasing and purchasing to no end is removed with this type of card, and in no time you will be able to reduce your debt dramatically in order to make your credit good again.