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However, not everybody is eligible for filling out a credit card application. Getting a credit card is almost an impossible task for bad credit customers. Prepaid Credit cards are a useful alternative for such customers.
Prepaid credit card is in many ways similar to a debit card. In case of a prepaid credit card, the cardholder is required to have a prepaid credit card account. The account is opened by depositing certain amount of money into the account. Once there is money in the account, the account holder is issued a prepaid credit card that can be used anywhere in the same manner as a regular credit card. Once the money in the account is spent, there is no use of the card until more money is deposited into the account.
In case of a prepaid credit card, the cardholder does not incur any debt and is not required to pay any interest charges to the bank. The entire money taken on credit through a prepaid credit card is deducted from the amount deposited in the prepaid credit card account and that is what makes this type of card very similar to a debit card.
In order to apply for a prepaid credit card and open a prepaid credit card account, the potential customer needs to make an upfront fee payment of about $5 to $10. This fee is recurrent and has to be paid by the customer whenever additional cash is deposited in the account. However, prepaid credit card offers a variety of advantages.
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