F
ree Prepaid Credit Card can be easily accessed by those who are unable to to get hold of a traditional credit card due to approval problems. This is not a conventional credit card but a credit card type with its own special characteristics. Free Prepaid Credit Card needs to be loaded with fund before transaction is made.
In case of a traditional credit card, the customer makes the purchase through a credit card and in turn becomes liable to pay the outstanding debt within a specified time-limit. If he is not able to repay it within grace period then the card issuing company charges the customer with a predetermined rate of interest. A very common phenomenon in such a case is excess expenditure by the customer leading to consequent default.
But in case of the prepaid card the consumer has to buy the credit card from a company and then has to load it with the required amount of money. Only after that he could use it for further buying but strictly within limit of the loaded money. Hence, it is also known as Stored-Value Card. Prepaid credit card helps a person to plan about his expenditure in advance and to expend strictly within limit otherwise he has to reload the card for excess expenditures.
Advantages of free prepaid credit card are :-
Helps in restricting the excess spending through credit card
No credit cheque is done on the prepaid credit card
Employment verification is not mandatory
No interest rate is ever charged
Security deposit is not required for opening or holding the card
The annual percentage rate (APR) is not charged along with the introductory APR. Most of the companies, except for some, offering free prepaid credit cards don't charge any annual fee. For this reason this type of credit card is known as free prepaid credit card.
But this claim of free card becomes a sort of a misnomer when the companies start charging registration and other associated fees. Whenever a person reloads more money into his card, the company charges an extra fees from the customer.