Whether you have bad credit or you don’t trust yourself with a credit card yet, a prepaid credit card may be for you if you’re a college student.  The nice thing about a prepaid credit card is that you’re able to place money on your credit card before you actually use it.  This way if you use your credit card, you won’t have to worry about maxing it out and worrying about going into debt.

What exactly is a prepaid credit card, I still don’t understand?

All major credit companies such as Visa®, Mastercard®, etc. offer prepaid credit cards.  The applications work just like a regular credit card.  You’ll simply fill out the application and most likely you’ll be approved.  As I mentioned above, you’ll then have to add funds to your prepaid credit card.  This can be done by many ways ranging from directly connecting your checking account to sending in checks to the credit card company.  It’s all up to you on how much you want to put on your credit card.

What’s the point of getting one?

A prepaid credit card is usually intended for people with really bad credit.  Credit cards, as you may know by now are great for making purchases online and carrying around so you don’t have to carry cash.  A prepaid credit card is designed just like a credit card.  If you get it stolen, you won’t be responsible for the purchases made on your card. 

The reason a college student should get this card before they actually apply for a regular credit card is because you’ll be able to see how a credit card functions.  It will also teach you a little bit of motivation to show you exactly how much you’ll spend, etc.  Unlike a credit card, when you don’t have enough funds on your prepaid credit card, you won’t be able to use it.  A lot of students will get a credit card for the first time and they will find themselves spending more than they can afford.  If you can use a prepaid card properly, you will be ready for a real student credit card.

What do I look for?

When applying for a prepaid credit card, you will find that there’s a big selection like most of the other credit cards.  Make sure that you look closely at the annual/monthly fees as most prepaid credit cards do have fees.  Find out which credit card will work for you and apply for it like any other credit card.  Unfortunately, you will find that most prepaid credit cards won’t offer any types of rewards. 

If you feel you’ll be responsible with a credit card, go ahead and apply for a credit card designed for college students.  If you still feel like you’ll spend more than what you earn, try out a prepaid credit card and see if you can use it properly.  Once you feel comfortable, then you can make the next step to build up your credit.

We recommend the All-Access(r) MasterCard(r)