Prepaid Credit Cards

Prepaid Credit Cards are cards very similar to bank debit cards, which in fact are not credit cards at all. In order to get a prepaid credit card you need to deposit money with the financial institution issuing the card, and then you get a prepaid credit card (for example Visa or MasterCard), which you can use with any merchants that accepts your particular brand of credit card. As we mentioned earlier the prepaid credit card is not credit card, because its owner doesn't borrow money when using it. Instead the prepaid credit card owner uses the funds deposited in his account. Once the card owner depletes his/her account, they can no longer use the prepaid credit card for purchases until they deposit more funds into the prepaid account.

Why do you need prepaid credit card?

Credit cards are used in many daily activities like renting a car, booking a hotel, vacation or flight. Unless you have a credit card you will have a hard time to do any of these. Getting regular credit card is not always easy (if you have no credit history for example or if you have bad credit history) that's why getting a prepaid credit card might be a good option in case you are having problems obtaining a standard credit card. If you need a real credit card, but you can't qualify for one, try getting a secured credit card.

Prepaid Credit Card Fees

You should be aware that when you initially open a prepaid credit card account and every time you deposit cash in the account thereafter, you will be charged a small fee. However if that's your only option to have a credit card, then you'll have to pay the fees.

Who uses the Prepaid Credit Cards?

We already discussed why you need a credit card, and obviously the people using prepaid credit cards are the ones who cannot qualify for regular credit cards. This group might include people with damaged credit, young people or recent immigrants with no credit history, teenagers who shop online, etc.

Prepaid Credit Cards in Canada

Both Visa and MasterCard offer prepaid credit cards for Canadians. The prepaid Visa cards are also known as Visa Gift Cards and can be used anywhere Visa is accepted. MyCard MasterCard prepaid credit cards are issued by Peoples Trust Company in Canada and can be used for purchases everywhere MasterCard is accepted.