Prepaid Credit Cards for Building Your Credit Rating

This piece is intended to touch on prepaid credit cards, but I found our writers fell short on this one. There needs to be more detail in the area of prepaid credit cards as an important step in re-building your credit rating.

For instance, when I was finally discharged from bankruptcy, I got a prepaid credit card that only had a limit of $600, which I had to pre-pay. This was the only credit card I had for over 5 years. It did help me regain my credit rating, which is full again.  

Can you buy prepaid credit cards the same way that you can buy prepaid phone cards?

There is a big difference between the two, yet a prepaid credit card is not that unreasonable. Consumers can buy or apply for many different credit cards and be approved within minutes as long as they have a good credit rating and generally have a history of paying their bills and in particular their credit cards on time.

So how does the prepaid portion of this work? Actually, all you need to is have a bank account that has been set up to make a payment once a month, or even more often to your credit card. There are a number of ways to prepay and manage your credit card balance at the same time.

The easiest approach is to set up your bank account so that it prepays your credit card each and every month a set amount whether you use the card or not. Yes you can do that. Your card may show a positive balance some months and a negative balance other months, depending on how much you have actually charged on credit to the your card.

Some specialty cards can be set up to make a demand payment for the balance on your credit cards at the end of the month to your bank account. Using this approach means you never will miss another payment, however customers must make sure that they always have sufficient funds in their bank accounts all of the time to handle any payments that are made to your credit card.