Prepaid credit cards have their uses just like any of the categories of the credit cards that are out there. I’ve used these credit cards myself and I’ve given them as gifts. I liken them to gift cards and I’ll explain why a little later on. Most of the major credit card companies offer prepaid cards and you might be wondering why if there isn’t any interest to be charged to you. What’s in it for them? Plenty as you will see soon enough.

You might be wondering why someone would choose to get a prepaid credit card and the answer could be for any number of reasons. Most often a prepaid credit card is used if accessing an unsecured credit card is too difficult. In today’s society not everyone is able to gain access to a regular credit card. And yet it is becoming increasingly more difficult to go about daily living without a credit card of some sort.

Ever tried to access a rental car or book a hotel room? And these are common events for even the most cloistered of us in today’s world. Bottom line is that you need to have some sort of credit card to find your way around modern society. But if your credit is in the gutter then it can be hard to get a regular credit card.

In addition, prepaid credit cards are a great way to have a single source of funds at your disposal. Some folks don’t want or can’t afford a regular checking account. And with a prepaid credit card you can have your paycheck direct deposited onto the prepaid credit card. And most of these prepaid cards also allow for bill payments, so you really don’t need a banking account if this is your choice. I knew a guy like this who just had a prepaid credit card and used it for everything. The great thing that he liked about it was that he would never get dinged interest and late payment charges.

And this friend of mine was a man of small means. So each month he’d top up his card and then empty it out as the month went by. The fee for the prepaid credit card was less he figured than having a checking account. His landlord charged his rent to the card. In addition there are hardly any places around that don’t take credit cards nowadays, and he’d been using it for months and never had a problem with not being able to buy what he wanted.

But like with all cards you should search around for the right one for you. Prepaid credit cards are just like the others and they come in all shapes and sizes. One of the big benefits of a prepaid card over a secured credit card is that you don’t have to come up with the minimum amount of $500 that secured credit cards require from you. This can be a plus if you want one now but only have a hundred bucks or so.

Some of them are free and some have fees associated to them and others will wave the fee if you have your paycheck direct deposited onto the prepaid card.

I personally like to give them as gifts to my nieces and nephews at Christmas time. They love it because it makes them feel all grown up when mom or dad takes them out shopping and they get asked how would they like to pay and they say credit. Additionally I really think they are learning some valuable lessons about the use of credit even if a prepaid credit card is used more like a debit card. It helps teach them financial responsibility which I don’t think can ever be flogged too much.