How Prepaid Credit Cards Differ From Other Bank Cards
By: kalius
If you are considering using a prepaid credit card, it is
important to understand the difference between it and other bank
cards. In this article I will discuss the key differences between
these cards.
When people begin using ATM cards in the 1970s, there weren't many
places they could use them. While credit cards were able to be used
virtually anywhere, ATM cards could only be used at the machines.
However, as time passed, more features begin to be made available
to people with ATM cards.
People begin to be able to check their balances and transfer money
between accounts. The debit card was soon introduced, and by the
end of the 1980s merchants begin to accept them for point of sale
transactions. To make these transactions, customers had to enter
their private PIN.
As debit cards begin to be used more like credit cards, credit card
companies were beginning to discover that they were losing
customers. Many people didn't have the credit necessary to use
their cards, and had switched over to ATM and debit cards. The
large credit card companies begin to work with the banks in
introducing a new type of card onto the market.
This card has come to be known as the prepaid credit card. It
differs from a standard ATM card in that it can be used to withdraw
money from ATMs as well as make purchases in stores and online. It
differs from a standard credit card because it doesn't come with a
balance and funds must be loaded onto it by the customer.
A prepaid credit card differs from a prepaid debit card in the
sense that users may be able to increase their credit rating when
using it. They also don't require a PIN to access funds with the
exception of when you're trying to withdraw money from an ATM.
Customers must pay for a prepaid credit card up front, while they
are issued a traditional credit card free of charge. This is how
the large credit card companies make their money. The money on
prepaid credit cards aren't borrowed like standard credit
cards.
The money that the customers have on the card is the money that
they have added. They are able to control their own credit limits,
and can add money whever they run out. ATM cards are simply used to
pull money out of a checking account, but cannot have money
actually added to them.
The writer of this article is the webmaster of Prepaid Credit Cards Website. On this website you can find information about prepaid credit cards and a list of vendors that sell these credit crads over the internet.
Article Source: http://www.articledashboard.com