The Several Types of Prepaid Credit Cards

Prepaid Credit Card Offer Consumers Many Options

Several types of prepaid credit cards exist for consumers, and each can meet a certain spending need.

The first type of credit card is a gift card. Gift cards are generally available through one merchant and have to be spent with that one merchant. For instance, stores such as Target offer gift cards that can be purchased for a set amount. This gift card can only be used at Target. This type of credit card is a closed card, which means that the card cannot be used with other merchants.

The second type of credit card is the teen card. Teen cards are purchased by parents and used by teenagers in lieu of a credit card. This type of credit card gives parents more control over what their teen is spending. The teen card is an easy way for parents to monitor their child’s spending habits and to teach their teen how to manage money. Teen cards are open credit cards, meaning that they are accepted wherever the brand of credit card is accepted. Therefore, they can be used with a large variety of merchants.

Travelers can also benefit from a traveler’s prepaid card. These credit cards work much like a traveler’s check. The amount is preloaded onto the card before the traveler leaves for vacation and then used during vacation.

These credit cards are an excellent option to the traditional credit card, since they do not incur monthly finance charges and the consumer can keep track of what he is spending rather than being surprised with a large bill at the end of the month. The variety of prepaid credit cards allows consumers to find a prepaid credit card that fits their spending needs.