Prepaid credit cards have been growing in popularity over the

past few years. But despite the 'credit card' name, no credit

is actually involved. Here’s how it work's.

When a standard credit card is used, you pay for the

convenience of being able to purchase items without saving the

money up first. The issuing bank is basically lending you money

, to be repayed on a regular basis. But with a prepaid credit

card, there is no line of credit or loan. Instead, the user

will make deposits to their bank account, and then use the

credit card to withdraw that money for purchases. Why would you

use a prepaid credit card if you don't actually get any credit?

A prepaid credit card is a excellent choice if you want to be

able to make purchases online without taking the risk of giving

unknown merchants your credit card information and access to

your credit line. Lots of people today are sensitive to online

credit fraud, and this is one of several ways around it. But be

aware though, many merchants that require you to make monthly

payments will not accept a prepaid card for purchases.

A prepaid credit card is also an great way to provide a weekly

or monthly spending allowance to a child away from home, let's

say, at college. The student has the convenience of being able

to charge different items on the card, and you can easily have

control over the amount that the child spends by the amount of

the deposits made to the account. This will go a long way in

teaching them how to manage their money.

If you have decided that a prepaid credit card is the right

choice for you, there are a lot of options available that can

offer you varying benefits. Perhaps you're looking to repair or

restore your credit. Could be you want a way to give your

away-from-home student a monthly allowance. No matter what your

reason, why not choose a prepaid credit card that allows you to

earn income at the same time?

Prepaid Credit Cards That Help You Restore Your Credit

Not every financial institution that issues stored value credit

cards makes reports to credit agencies about your spending

history. If part of your reason for applying for a prepaid card

is to repair your credit history, make sure you choose a company

that does make reports. There are also a number of issuing

companies that offer credit reporting as an add-on service for

an additional fee.

Prepaid Credit Cards That Pay You Back

Some major financial institutions will offer you a prepaid

credit card with an opportunity to make income. They offer a

rebate on spending, or a referral program. If you don't need to

build your credit, and believe that your income through spending

rebates and referrals will exceed the annual

membership fees, then these types of cards might be a excellent

choice for you.

What ever your reason for choosing a prepaid credit card, be

sure that you shop around to get the best deal, and that you

check out the financial institution to make certain that they

are a reputable business.