The Insider Look of Visa Card

VISA is the world's leading brand of electronic-payment card. There are more than one billion Visa cards in circulation.

The two main forms of electronic-payment card are credit cards and debit cards. A credit card enables its holder to make purchases on a line of credit (a kind of loan) issued by a financial institution, usually a bank. A debit card (also known as a check card) simply allows its holder to access existing cash funds in his or her checking account. Whereas a credit card allows the cardholder to repay the amount of the purchase to the bank in monthly installments, debit cards require that the purchase be paid for in full at the time of the sale.

Visa is the brand name of Visa International Service Association, a company owned by some 20,000 member banks that are licensed to issue Visa cards under their own names (for example, Bank of America Visa or Wells Fargo Visa). Visa International itself does not issue cards or provide credit to cardholders. Rather, each member bank issues the cards, setting its own terms of agreement (such as the annual fee for using the card, the interest rate that will be charged on outstanding credit balances, and late-payment penalties) with cardholders. Member banks are also responsible for contacting merchants with requests that they accept Visa cards and for providing the necessary technical support for these merchants to handle Visa purchase transactions. The banks that issue Visa cards compete with one another for cardholders, yet they are all bound together by the need to cooperate so that participating merchants can take a Visa card issued by any bank.

Visa International's central role is to serve as a hub between cardholders and merchants. It does this by maintaining the massive, around-the-clock electronic-payment network through which purchases are processed. Visa International is also responsible for enhancing its brand name through marketing, sponsorship agreements, and other activities. In turn, Visa makes most of its money by charging its member banks fees.

The Visa brand traces its origins to 1958, when California-based Bank of America began issuing BankAmericard, the first electronic-payment card of its kind. In 1966 Bank of America began licensing other U.S. banks to issue the BankAmericard. In 1970 the bank agreed to sell the BankAmericard credit card program to NBI (National BankAmericard, Inc.), a newly formed corporation in which all of the banks that issued BankAmericard had equal ownership. The creation of NBI was spearheaded by Dee W. Hock (b. 1929), a banker at National Bank in Seattle, one of the licensee banks.

In the early 1970s BankAmericard began a process of international expansion. Through agreements with foreign banks, the card was issued under many different names, including Barclaycard in the United Kingdom, Chargex in Canada, Sumitomo Card in Japan, and Bancomer in Mexico. Finally, in 1976 BankAmericard and affiliated cards were rebranded as "Visa," a name that could be instantly recognized (and pronounced the same way) all over the world.

Since the name Visa was introduced to the world more than three decades ago, the company has achieved phenomenal growth and capitalized on emerging technologies to increase the efficiency, convenience, and reliability of its services. Throughout most its history, Visa surpassed its main competitors, including MasterCard, American Express, and Discover, in terms of brand recognition and worldwide billings.

One of Visa's greatest successes in promoting its brand name came in 1986, when the company became the official credit card sponsor of the Olympic Games. According to the agreement, Visa would pay a significant sponsorship fee in exchange for being the only credit or debit card accepted for purchases of tickets, souvenir merchandise, and all other items sold at Olympic events. Visa would also be the only card accepted by automated teller machines (ATMs) in the Olympic complex and other official Olympic venues. Further, Visa would be the only credit card company entitled to advertise or display its logo at the games. This exclusive agreement, which was planned to continue through the 2012 Olympics, proved enormously successful in raising international public awareness of the Visa brand.

Also during the 1980s Visa greatly expanded its services by providing cardholders with immediate access to cash through a partnership with Plus System, Inc., one of the largest ATM networks in the United States. In the late 1980s, through an agreement with Interlink, the largest network in the United States for accepting debit cards in restaurants and retail stores, Visa became the leading brand for debit cards nationwide. By enabling its cardholders to use a debit card to pay for everyday purchases such as groceries and gas, Visa opened up a vast new frontier of payment convenience for its cardholders. In the 1990s, with the advent of Internet commerce and the rapid increase in demand for debit card use, Visa was focused on implementing new technologies to improve the speed, capacity, and security of its payment-processing network.

Credit Card Terms You Should Know

When looking for a credit card it is important to understand the various terms related to credit cards. Below are some of the most common terms you will come across when searching for a credit card. By understanding these terms you can better compare credit card offers and determine which is the better offer.

Annual Fee:

Many banks or card issuers may charge a annual membership fee for their credit cards. The fee may range from $25 to over a $100 depending on the card. There are also many cards out there that no have no annual fee!

Annual Percentage Rate:

Often referred as the "APR", this shows how much credit will cost you on a yearly basis. The lower the rate the less you will pay on interest charges. There are two types of APR:

1.Variable APR:

A variable annual percentage rate allows credit card issuers to change your APR based on fluctuations in indexes such as the prime rate.

2.Fixed APR:

A fixed annual percentage rate is not subject to adjustment based on indexes like the variable rate. But beware that credit card issuers reserve the right to change the your rate at anytime.

Average Daily Balance Method:

This is the most common method that credit card companies use to calculate your payment. An average daily balance is determined by adding each day's balance and then dividing that total by the number of days in the billing cycle.

Billing Cycle:

The number of days between the previous statement date and the current statement date. The billing cycle is typically between 27 to 33 days long.

Credit Line:

This is the most you can charge on your account. Under some conditions, your card issuer may increase or decrease your credit line.

Finance Charges:

The total charge for using a credit card consisting of interest charges, late fees, transaction fees and other charges.

Grace Period:

Many credit card companies offer a grace period where no interest is charged. The typical grace period is usually between 20 and 30 days. However, if there is no grace period, finance charges will accumulate the moment a purchase is made with the credit card.

Introductory APR:

Also known as a teaser rate, many credit card companies will offer a low interest rate for an initial period of time to encourage consumers to accept their credit card offer. After the initial period the rate will change to the stated interest rate.

Periodic Rate:

This is the interest rate described in relation to a particular amount of time. For example, the daily periodic rate is the cost of credit per day.

By John McClendon

18 Thousand Applications Denied Credit on a Daily Basis

Ever wonder how many people are getting declined when applying for a credit card?

Well, a new report issued by UK-based MoneyExpert.com found that roughly 18,000 applications are rejected by credit card issuers on a daily basis.

That’s 3.24 million rejections over a period of 180 days if you’re counting.

Their research figures revealed that about one out of every 14 people, or 7 percent of adults, have been rejected from a credit card issuer in the past six months.

Young adults are apparently the worst off, with 10 percent of those aged between 25 and 34 denied in the past six months.

Conversely, only three percent of people aged between 55 and 64 were denied during the same period, as they are assumed to be the lowest risk category.

The company noted that the enduring credit crunch has forced banks and lenders to step up their guidelines, leading to a higher rate of denial.

Of course this is a study of British consumers, and it’s unclear if United States standards are higher or lower than theirs.

Either way, it’s clear that a large number of consumers in need of credit are being denied, which could lead to a larger number of defaults on existing credit cards.

Federal Reserve to Propose New Credit Card Rules

The Federal Reserve is reportedly putting together its own rules to tackle unfair and misleading credit card practices, according to the Washington Post.

Per the article, things like arbitrary interest-rate increases and two-cycle billing are on the agenda.

Discover is currently the number one purveyor of the two-cycle billing method, which can lead to significantly higher finance charges.

The new rules would also force credit card issuers to better disclose terms and conditions to cardholders, ideally not buried in the small print.

In recent months, some credit card issuers have eliminated universal default, but at the same time, raised the cost of late fees and balance transfer fees.

But things like negative payment hierarchy, the practice of paying off the lowest APR charges followed by the highest interest charges, should be addressed as well.

Credit card issuers have long been scrutinized for their seemingly unfair practices, including the latest move by many to fix interest rates as rates continue to fall.

It seems card issuers are constantly devising ways to trap unknowing borrowers, and hopefully the move by the Fed will address some of those issues.

As expected, several card issuers have already warned that new restrictions could hurt all borrowers by raising associated costs and interest rates.

Only time will tell if any meaningful changes come about from all the proposed legislation.

Finding the Best Credit Card Deal

It used to be that money was the root of all evil, but credit cards have now surpassed the greenback as the most sinister form of payment in the U.S to some. The reason for this changing of the guard is quite simple; irresponsible consumers are running up huge amounts of credit card debt and not paying it back. It's a shame because in favorable hands credit cards are a fantastic way to establish credit.

Some of the major players in the credit card industry today are:

• American Express
• Capital One
• Visa
• MasterCard

Their marketing teams spend tireless hours behind closed doors brainstorming ways to get your signature. They even invest in multi-million dollar advertising campaigns in hopes of landing you. I'm sure you recognize the following campaign slogans; "Are you a Cardmember," "Priceless," "It's everywhere you want to go," and "What's in your wallet." But did they do an effective job of marketing their brand? Do you know which slogan is married to which card?

American Express runs the Are You A Cardmember campaign with Tina Fey as their latest celebrity addition. Fey joins tennis great John McEnroe on this current ad blitz. Priceless is synonymous with Peyton Manning and MasterCard. You may recall his, "Cut that meat," quote in one hilarious spot. Visa is the proud owner of It's everywhere you want to go. The six degrees of Kevin Bacon ad was certainly noteworthy. And Capital One, minus the celebrity star power, owns the copyright to What's in your wallet? These campaigns are designed to showcase the value of membership and its array of special benefits and services while distinguishing themselves from their counterparts. But which one's right for you?

Mark Marquis of the Student Loan Network educates thousands of students and credit card hopefuls each year about what to look for. According to Marquis many consumers still hold their first credit card which isn't necessarily a good thing. "A lot of students snagged a credit card during their college careers, which was great in a pinch," says Marquis, "but the interest rate probably leaves much to be desired." Rule number one, shop around. Not all companies require a credit score resembling that of Barry Bonds career homerun mark (762) to get a good rate.

You should also be wary of giveaways. Common practices used to lure students to sign-up for high interest rate credit cards are free merchandise; although that's actually how I landed my first card. I got a free t-shirt for my John Hancock. I also got (gulp) a 22.9% APR too. Thank god I read the fine print. I was mindful of the balance I kept. Truthfully I was just excited to have the plastic. My friends who applied with me were turned down, but not me. Now I could order 65 large pizza's from Domino's on a Friday night (I wonder if they could do that in 30 minutes or less) with my $500 credit line. I was the big man on campus and loved the fact I had my visa.

Still, there is a camp of people in the U.S. who think credit cards are evil, Marquis says. They think spending money that you don't have on hand is an inappropriate financial practice and cash/checks should be strictly used at all times. The reality is there are a number of legitimate reasons to pack at least one card in your wallet.

Five reasons you should hold a credit card are as follows:

• it's an easy way to build credit,
• you can earn rewards points,
• great for emergency situations,
• most offer credit card checks at lower fixed interest rates,
• and cash advance availability.

It's true that in the wrong hands credit cards can be an addictive evil, but so can just about anything in this world. As long as you are disciplined and can exercise restraint I would advise applying for one. Credit cards, as we've learned, can serve as an excellent gateway to a stable credit future. Barbie may wear her plastic well, but your plastic is far more valuable.

Source: Associated Content

Six Good Reasons To Carry Multiple Credit Cards

Many people are afraid to have multiple cards. Some are afraid that they'll lose track of the different bills each month and fall behind on their payments. Others fear that the temptation of high credit limits will entice them to overspend. And some people fear that creditors, upon seeing multiple open credit lines, will be less likely to lend them money because the creditors suspect they're more likely to fall into debt.

Americans seem to be split on the issue of having one credit card or multiple cards -- in fact, 51 percent of the U.S. population has two or more credit cards, according to the Center for Media Research.

Emily Davidson, a credit expert with Credit.com, says people often ask, "What's the magic number of credit cards I should have?" According to Davidson, there is no clear-cut answer. "You should have as many cards as you feel you can manage responsibly."

For responsible people, however, there are a number of benefits to having multiple credit cards.

Financial safety
A simple reason to keep multiple credit cards is safety. If a person has only one credit card, there are a number of problems that can arise.

Several credit experts interviewed say consumers should keep one credit card with a zero balance in a safe-deposit box or other safe place outside of their own home or wallet. This way, if your wallet or purse is stolen or your house burns down, you'll have a credit card to use while you wait to have the damaged or stolen cards replaced.

A second safety reason would be for use exclusively for online purchases. While online shopping is convenient, one of its primary pitfalls is the possibility of identity theft. A separate card designated for such purchases makes it easier to spot fraudulent activity and could help limit the damage if you ever are a victim of online identity theft.

Multiple credit cards also give consumers a back-up in case their primary card is denied. Recently, Davidson traveled to Europe with a friend, who carried only an ATM card and a Discover card. The friend's ATM card was blocked (because the card company overzealously suspected fraudulent activity) and her only Discover card was not accepted by many establishments.

Rewards
The most fun aspect of having multiple credit cards is the rewards. These days, consumers can get cards that give reward points for each dollar spent.

Maya Held, a professor at Marquette University, is so fond of the perks provided by reward cards that she currently has more than 15 credit cards. Her array of cards gives her gift certificates to Amazon.com and Target, among other places. When she reaches enough reward points on her Mypoints.com credit card, she gets to choose a gift card from a number of different establishments (as opposed to getting rewards for just Amazon.com or Target).

Scott Bilker, creator of Debtsmart.com, likes to use his reward points for movies. Bilker and his family of five use the rewards for movies once or twice a month -- including popcorn and drinks. "We haven't paid for a movie in over two years," says Bilker, who says that he still has $389 worth of movie theater gift certificates to use.

However, there are a few pitfalls. The biggest is that the reward cards often come with higher interest rates. As a result, these are not the kind of cards that people want to accrue debt on. "I don't keep balances (on reward cards)," says Held. "If I do, I transfer my balance to a zero-percent card." Expensive purchases that a consumer will not be able to pay off right away should be put on a low-interest card.

The other pitfall consumers should be aware of with reward cards is that the points usually max out -- customers stop getting points after a certain amount of purchases in a year. According to Barbara O'Neill, the extension specialist in Financial Resource Management at Rutgers University, people who make lots of purchases with reward cards should keep a couple of reward cards active to maximize reward opportunities in case they reach their cap on one reward card.

Credit score aid
Many people are reluctant to have multiple credit cards because they're afraid potential lenders will be scared off by a person with multiple credit lines and a high credit ceiling, figuring that lenders will assume such a person will be more prone to debt.

"That's not how credit scores work," says Davidson. "They (lenders) value having a lot of established, old credit cards on your account. Having a lot of activity and responsible behavior reported to the bureaus is good for your credit score."

According to Davidson, the most important aspect of your credit score is the debt-to-limit ratio. This is a ratio indicating how much debt you have in relation to your credit limit. As a result, you will have a higher score if you have lots of available credit and pay your bills on time.

Held's experience supports this argument. With all of her credit cards and credit card activity, her good credit allowed her to purchase a home in 2005. "I've never had a problem with loans or anything else I've needed," says Held.

Finally, Davidson says, many banks are closing credit card accounts as a part of cost-cutting measures. Whether it's the consumer's choice or not, a closed credit card account will adversely affect that person's credit score. If an account gets closed, the impact will be more severe to someone who just has one or two cards, as opposed to someone who has six to eight credit cards.

Staggered bill paying
Consumers with multiple credit cards can plan their spending so that it coincides with their bill cycles. "You can line up your credit card bills with your income periods," says O'Neill.

For example, a thoughtful consumer can arrange it so one of his or her credit cards has a billing cycle that ends on the 10th of the month and another that ends on the 25th. If that you pay careful attention, you can use the first card for purchases shortly after the 10th and the second one for purchases shortly after the 25th, maximizing the amount of time in between the purchase and when the bill must be paid.

Easier bookkeeping
Often, people use their credit cards for work expenses that their employers eventually will reimburse. According to O'Neill, a person with multiple credit cards can set aside a single credit card for work purchases, which would save them the trouble of going through credit card bills each month, trying to separate personal expenditures from work expenditures.

The same principle can be useful if you're self-employed. When tax season rolls around, you can easily identify work-related expenses for tax deductions if you used a credit card specifically for work expenses -- making the tax preparation process that much easier.

Leverage
If you have multiple credit cards, you can play one bank against another -- for your business -- to give you the best interest rate and for the best perks.

"Having multiple credit cards means you have options," says Bilker. "(It gives you) ... the option to fire one bank and hire another if you don't like the job the bank's doing."

Having options can give you leverage in getting lower interest rates. "You can simply call and say, 'Hey, I'll transfer my balance to you if you give me a good deal,'" says Bilker.

Source

Chase Freedom Credit Card Review

There are plenty of commercials that are constantly advertising the Chase Freedom Credit Card. What you are probably wondering by now is whether or not the Chase Freedom credit card is really worth applying for in the first place. The first thing you should know is that this card is for those who have great to perfect credit. So if you have bad credit you should not even bother applying for this card.

Lets first look at what the card offers like 3% cash back from grocery and gas purchases made on the card, and 1% for various other items purchased. They also offer 3% cash back for using your card at local fast food restaurants. This is definitely a plus to anyone who likes to eat out often. Unfortunately they don't offer cash back for all purchases made on the card which could be a turn off for some. Especially when you compare that with other cards that are similar. Of course another plus is that you can convert your dollars over to points and turn those points into rewards. Once your rewards account reaches $50 you can them get your check. If you get up to $200 in rewards they will give you $250 cash back. That is definitely a huge incentive. You also have the option to choose whether you want to earn cash or points.

The Chase Freedom Credit Card also has blink technology, which makes things go a lot quicker when you are at the checkout line. All you do is hold your card up to the scanner and go. I'm sure you have probably seen the commercials advertising that particular feature. Keep in mind that there are some transactions that you will have to pay for. You also have the option to customize some of your account features, including your billing and payment options. Chase also offers insurance such as auto rental and emergency travel assistance services.

The APR starts at 0% for the first 12 months with no annual fee according to www.chaseinformation.com. After the 10 months the APR rate is 17.24% for purchases and 23.24% for cash. They are also offering a $50 bonus rebate after your first purchase. Of course the downside is that the APR does seem a little higher than some of the other credit cards. Even though you get all of the rebates and the cash back rewards it really may not come out to much when you factor in the rate. Unless of course you are able to pay off the full balance each month, than having this card could be very beneficial with their rewards program. I would highly recommend that you pay off the monthly balance to get the most for your dollar and avoid those finance charges. You can visit www.chaseinformation.com, to apply and read about the rewards and bonus programs that are currently offered with the Chase Freedom Credit Card.

The bottom line is that the extra rewards are definitely a huge selling point for this card. Even the fact that you can switch between cash and rewards.

City Professional Credit Card Review

If you are looking for a new credit card for your business, then you should check out the Citi Professional Credit Card. This card has no annual fee, and no interest on balance transfers for one year. The Citi Professional Credit Card has a variable 12.49 percent interest rate on any credit card transactions. Unfortunately there is no period with a low introductory interest rate. The good news is the benefits of the Citi Professional Credit Card when it comes to rewards are very good though. These include enough "ThankYou Points" credited to your account after your first transaction for a $100 gift card.

The total points you receive after your first transaction is 10,000 "ThankYou Points". This means that every "ThankYou Point" is worth one cent. This is good news for you if your business credit card is used for purchasing a lot of meals, gas, or car rentals. Why would that be beneficial to Citi Professional Credit Card Owners? It is because for each of these categories you receive three "ThankYou Points" for every dollar spent. This means in effect that you are earning 3 percent back on ever transaction you make with the Citi Professional Credit Card in these categories. Not a bad benefit for spending money just like you would with cash. Of course if you spent cash you wouldn't get the three percent back like you do with the City Professional Credit Card.

The "ThankYou Points" are not the only benefit of signing up for a City Professional Credit Card for your business. You will also get managment tools online that will help you categorize your expenses for when tax time comes around. This allows you to categorize and total the expenses in each category. The City Professional Credit Card also includes several benefits for you when you travel. You get travel accident insurance, travel and emergency insurance and Auto Rental insurance when using your Citi Professional Credit Card.

For those of you that are looking to save money on prescriptions, as a City Professional Credit Card holder you will also receive a prescription discount card. This discount card will give you anywhere from ten to sixty percent off your prescription costs at participating retailers.

Some things you should be aware of with the Citi Professional Credit Card though is that if you fail to make your payments on time, the 0% APR for your balance transfers may not remain in effect as a result of the late payment. There is also a fee that the City Professional Credit Card holder will have to pay for their initial balance transfer. As always, reward credit cards are only a good investment if you pay off the balance of credit card transactions on a monthly basis. Otherwise the interest you pay on balances outweighs the benefits of the rewards.

Overall as a business owner, the Citi Professional Credit Card is a card that is worth applying for. Why not go ahead and enjoy that free $100 gift card after your first purchase, 3% back on purchases in many categories, and other benefits when paying expenses with your Citi Professional Credit Card instead of carrying cash.

Source: Associated Content

Budget Your Way Out of Credit Card Debt

One of the fastest growing problems among the younger generation is credit card debt. More and more individuals are living paycheck-to-paycheck and they have to bridge the gaps in their finances by using high interest credit cards. Credit card debt is certainly not fun and it's something that can quickly ruin any hopes and dreams of becoming financial secure in your financial future. Getting out of that debt isn't easy, though. It requires meticulous planning and the ability to both create and maintain a strict budget.

When most people hear the word budget, they get scared. A budget shouldn't be a scary thing, though. Every financially responsible individual operates on some sort of financial plan in order to make sure that their finances are going the right places. In a way, a budget lets you tell your money where to go instead of, at the end of the month, wondering where it went. Here are some tips on how to effectively set up a budget to get out of credit card debt.

Write it all down

Before anything else can be done, you have to understand exactly where you're at. Lay out all of your credit card debts on a table and get the facts. Even though the numbers might be ugly and scary, it is best if you understand exactly how much money needs to be paid off. Note the total balances, the minimum payment amounts, the interest rates, and the due dates on each credit card. Once you have this information, you can move forward with a proactive budget plan.

What can you eliminate?

There are two ways to increase the amount of money that you can give towards credit card payments. Either you can make more money or you can spend less money. Since it's unlikely that your employer is going to double your salary anytime soon, the more realistic option is to eliminate some expenses. Take a look at where your money is going and try to cut the fat on some things. Are you spending an exorbitant amount of money on entertainment items? If there are things in your current spending that can be eliminated, it's your job to find them and make sure that they are discontinued.

Every dollar accounted for

Take a few hours at the beginning of each month and pull up a spread sheet. On that sheet, make note of how much money is coming in and each expense you plan on funding. This includes food, healthcare, your other bills, and any school tuition. Basically, you need to account for every dollar that is going to be spent. Then, you can have a much better understanding of where the money is going. From there, it will be easy to chart out a plan of action that will enable you to pay off those credit cards sooner.

Be Realistic

You won't pay all of your credit cards off overnight or in a lump sum. Plan how much money you can possibly pay to the debts each month. Figure out how many months it will take to get the debts taken care of on your charted plan. From there, you can make any necessary changes to your budget to make paying off the debts as easy as possible.

Source: Associated Content

Choosing the Right Credit Card
How to Avoid Credit Card Debt

Credit Card Consolidation Does It Work?

Having too much too much on your plate, too much to do or too many commitments always keeps you involved and it is obvious that it may lead you to a situation that is unmanagable, tiring and out of control. Further leading to loose your focus and making you inefficient in everything you are doing.

If you are carrying so many credit cards then it is a sure sign of danger you will face in the future. Market research tells that a standard person is having approx seven credit cards and he makes use all of the cards frequently and blindly. Therefore this can be unmanageable for you.

Take an example: if you make use of all the credit card too frequently, it will become very difficult for you to keep record of all the expenditure done by you by using each one of those cards. You should know how frequently you use each card their rate of interest and the annual fee, if any, that is being paid by you.

There is a famous phrase in English, it's never too late but you may soon realize that now it is actually too late. Reason, some people are careless and dont think of keeping a record of all their credit cards, their expenditure and variable interest rate if any one is used. And all of a sudden they come to know that they are into a significant debt. After some time such people are being surprised with serious debt issues, without warning.

It's a truth that we all know and agree that credit cards are the most precious and valuable devices that helps us in urgent situations. Though, you should be a little careful while using your credit card and should know the chances of getting into trouble (debt problem).

When you go under a significant debt in credit cards, this issue can be resolved by paying it all off. Credit card consolidation is one of the solutions to your problem. Consolidation means accumulating all the debts into one single credit card with a low rate of interest.

You can get more benefits when you consolidate all the cards and pay off all of your credit card liabilities. From the time when you start paying off your credit card debt with a single card, you can without any trouble make a record of your payment bills. This way of payment will definitely diminish your confusion that comes along with multiple bills.

Before initiating consolidation of credit cards debts you should check the rate of interest and compare. If the interest rates are exactly the same then there is no need to consolidate credit cards debts. If you are able to find a credit card with lower rate of interest then accumulate your all other credit card debts into this.

When your in debt troble you need to turn to the professionals for the right advise.That's why we've setup a credit card blog so you can read more about credit card consolidation and credit card debts.

You might want to read this?
Five Unnecessary Credit Card Fees You Can Avoid
5 Tips To Prevent Credit Card Late Fees
Do You Need to Cancel Your Credit Card?

The Benefits of Using a Prepaid Debit Card

Prepaid debit cards are great for people with lower incomes, don't have a bank account, or want to send money to a loved one.

First you need to know what a prepaid debit card is before you can know what the benefits of having one are. A prepaid debit card is a reloadable card that you can add money to in a variety of ways.

You can use it in addition to or to replace an ATM/debit card. Some people referred to as the 'unbanked' (no bank account) usually have lower incomes or be getting paid 'under the table'. They may not make enough money to consider opening a bank account or may not be able to produce the necessary documentation to get an account. Sometimes, these individuals (especially immigrants) are targeted by criminals because they tend to carry large amounts of cash on them. You also don't need to have a credit check or ChexSystems check to secure a card. A prepaid debit card allows these people to be able to have more versatility with their spending that they wouldn't normally be able to do unless they had a bank account. Simple things like shopping online, paying bills online or over the phone, reserving a hotel, renting a car, etc. are made easier and safer when you can use plastic to pay.

If you do have a bank account, you may like to have a prepaid debit card as an alternative if you have a habit of having your account overdrawn whether it was an oversight on your part or an erroneous charge of a merchant. Prepaid debit cards may have a small fee of $1.50 or sometimes no fee for an overdraft. Also, as opposed to a bank, a prepaid card will decline some charges if there aren't enough available funds. Many times banks will pay even though you have no funds in your account and slap you with high overdraft fees for each charge that comes through. So if you have one bounced check and you had four other point of sale purchases from your debit card at the same time of the bounced check, you'll get hit with NSF charges for the check and the four purchases. One small oversight can cost you big time eating up funds you may need to pay your rent or the like. When you're living paycheck to paycheck, many times it isn't worth the high probability of incurring exorbitant overdraft charges.

This type of card is beneficial too if you're on a limited budget and need to do a better job of managing your spending. Most of the time, when you are using a credit or debit card, we are easily tempted to overspend which can lead us into debt problems or being in a bind until next payday. The amount of personal debt many people are carrying is staggering. Only a few savvy consumers seem to be able to avoid this trap of the masses. When you give yourself a certain amount to spend on a prepaid debit card, you only have a certain amount of funds you allot yourself and when that is gone, that's it. It's like using cash to pay for your needs, but safer than carrying cash.

Another good reason for prepaid debit cards is if you have teenagers, a college student, or other financially dependent loved one and need to get money to them quickly, inexpensively, and easily. This can teach them good financial management practices to benefit them when they are on their own. It's a better option than having them constantly asking for your card.

One downside to these cards is that some tend to have high fees depending on your transaction habits. I've researched several different cards and have found one to have reasonable fees and excellent features perfect for my spending habits. This card is called Ready Debit. You can easily load cash onto this card from Paypal, direct deposit, Green Dot MoneyPak store locations, or a checking or savings account. You can pay for purchases anywhere Visa is accepted as well as withdraw cash from any ATM with a Visa, Interlink, or NYCE logo. You can also sign for point of sale purchases and your transaction is guaranteed to be covered by Visa's Zero Liability policy.

It's important to know that you do have options when it comes to how you manage your money. I think prepaid debit cards can become more popular as people become more aware of the benefits.

Source: Associated Content

Further reading:
Wired Plastic Prepaid Debit Card Review
Prepaid Traveler's Card Vs. Debit Card