You may have seen something on the Internet about prepaid credit cards. and wondered what exactly they are. How do they differ from regular credit cards? Do they affect your credit rating? What are the advantages to having a prepaid credit card?

Prepaid credit cards, although they look like credit cards and are used like credit cards, are not credit cards. Unlike credit cards, they are not tied to a line of credit. They are a card much like a gift card. As the name implies, the amount put on the prepaid credit card has already been paid.

Prepaid credit cards are a good option for parents who are leery of giving their son or daughter a credit card for the first time. It gives them the same freedoms that a credit card does, but it won't affect anyone's credit score.

Prepaid credit cards can be used anywhere regular credit cards can be used. They can be used to make purchases in stores, over the phone and online, although there may be fees associated with certain purchases. Check with your pre paid credit card provider to find out exactly what can be expected with the pre paid credit card you chose.

If your prepaid credit card is lost or stolen, most times the company which issued the card will put a stop on the the card and sometimes, but not always, reimburse you for the money that was lost while the card was not in your possession.

Prepaid credit cards are safer to use than cash because most times you need to enter a pin in order to use them, similar to a debit card. But unlike a debit or a credit card, it doesn't require a credit check in order to get one.

In order to get a prepaid credit card, all you need to do is to provide proof of identity and a mailing address. There are no credit checks, no employer checks, and nothing will be reported to the credit companies.

For someone who wants the ease and freedom of using a credit card, but doesn't want to worry about messing up their credit score due to late payments, a prepaid credit card is a good choice to make.

Credit cards are also a good choice for students going off to college for the first time. Parents don't have to worry about anyone's credit score being adversely affected by the student not paying their bills on time, yet it gives them a chance to see how responsible their child can be before they give them an actual credit card.

In short, prepaid credit cards are a great training tool to get people ready for using a real credit card.