Who is under 18 or has a poor credit rating has bad cards when it comes to applying for a credit card. Sometimes the credit rating drops faster than you can see. Often an unpaid invoice is enough for an entry in the credit bureau , where banks and financial institutions are strict. Anyone with a negative credit rating will not receive a credit card. Basically understandable, but a problem for customers. Especially if you need the credit card urgently. But even for young people, it is impossible to get a credit card. Of course, the parents can pass on the second card to the offspring here. But not all parents are ready to do this.
A very good alternative for these cases is the prepaid credit card
These are available from the various providers and have a very decisive advantage: The credit card is issued without a credit check. This only works because it is more a prepaid card with the characteristics of a credit card. If there is no credit on the card, it cannot be used. Basically, it is nothing more than a card that uses the credit of the holder, but can be used in the same way as a credit card. The advantages are apparent:
- There are no debts, since no liabilities can accumulate here.
- Young people can also use the card, for example when traveling.
- Customers with poor credit ratings can get a credit card.
- The customer decides for himself how high the credit should be on his card.
- In the event of theft, damage can only occur in the amount of the available credit, which clearly speaks for the security of the prepaid card.
Does the prepaid credit card also have disadvantages?
The advantages of the prepaid credit card are well known. But the card actually has disadvantages. Since this is not a credit card in the classic sense, it cannot happen that the user loses sight of his expenses. So there are no costs that may not be met. This crucial advantage can also be a disadvantage. If you want to use the prepaid card abroad, for example, but currently have no opportunity to increase the credit on the card, you cannot use it further. This can cause problems, especially abroad, if the credit card is the only accepted means of payment.
Another point is the recognition of the prepaid credit card
With a classic credit card, the card number is applied to the card in a 3D effect. This is a security aspect so that the card can be read correctly. However, the prepaid card does not have this imprint and is therefore not recognized everywhere and therefore not recognized everywhere. Depositing the prepaid card as security, for example when booking a hotel, is usually not so easy. Especially when the credit card is to be used when traveling, this can become a problem. Here it is worth considering whether it is really the best solution.
However, these are the only advantages that can be found with the prepaid card. The card can easily be topped up online using the account. As long as there is credit on the card, it can also be used. It can therefore be activated again and again. Thanks to the overview on the account and the own transfer to the card, users also have an excellent overview of the expenditure that is made with the credit card. This is a very good opportunity for young people to learn how to use money.