Many people are rejected after filling out a credit card application because of poor credit. The problem with this is that a major credit card is needed to make reservations for hotels, motels, car rentals and airline flights. Credit cards are also necessary when placing orders online or over the phone. Does this mean a person with bad credit can’t do any of these things? Not if that person has a prepaid credit card.

Depositing money into an account opens a prepaid credit card account, much in the same way you would make a deposit to open a checking or savings account. Once you have money in your account, you’re issued a prepaid credit card that can be used anywhere one would use a regular credit card. The best part of the prepaid credit card is that you can charge to your heart’s content and you won’t be in debt. The money is yours and once it’s gone, you can’t spend any more until you make another deposit. There are no bills and no interest charges. It’s the same principle as using a debit card linked to a savings or checking account.

So what’s the catch? First, you’ll have to pay a fee to set up your account. The amount varies, but you can probably expect to pay about US$5 to $10 to open a prepaid credit card account. In addition, you’ll have to pay additional fees every time you deposit more cash into your prepaid credit card account. For those with bad credit, the benefits of a prepaid credit card far outweigh the risks. They’re able to reserve rental cars or hotel rooms, and don’t have to worry about credit card bills and interest payments later.

Those who are planning to use the prepaid credit card to pay for a monthly Internet subscription, or to purchase an item where a fixed amount is deducted from their card each month, might be dismayed to learn that this might not be possible. Many of these businesses don’t want to do business with a prepaid credit card because there’s always the risk that there won’t be any money in the account when it comes time to pay the bill.

If you’re frustrated because a credit card is necessary to get by in today’s world, but can’t apply for one because of bad credit, you might consider a prepaid credit card. You’ll have most of the advantages of a credit card, and you won’t have to worry about interest charges. Sounds like a prepaid credit card is a pretty good deal.

But these prepaid cards do not report to credit bureaus. You would have to start establishing your credit by first obtaining a secured Visa or MasterCard, you deposit a certain amount of money (ex. $100) to so called CD account and you receive a credit card with $100 limit. Those banks report to all 3 credit bureaus, some report as a secured credit card account & some not. After a year the bank returns the deposited money and the account becomes unsecured, with the limit that you had. It is always a good idea to increase the limit before year ends, so you will end up with high limit card.

There is a good website that offers both secured cards and bad credit cards as well as guaranteed approval cards regardless of your credit, employment or income. You can visit that site and apply for a secured card even few cards each $100 or $150 to increase your credit score faster and higher. Each credit account is considered as a trading reference, more you have established - more credit you get from other creditors. Remember always make your payments on time and make little more than the minimum

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1. The Prepaid Visa Cash Card