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prepaid credit cards

BullioBullio Registered User regular
edited September 2011 in Help / Advice Forum
The mail-in rebate from my new PSU is being fulfilled via prepaid credit card. How do these work, exactly? Do they have fees or interest associated with them, or are they essentially "universal giftcards?" I'm assuming the latter is the case with my rebate fulfillment, but what about a general purchase of one? Can they be used to build a credit rating?

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Bullio on

Posts

  • TychoCelchuuuTychoCelchuuu PIGEON Registered User regular
    Lots of them start deducting fees after a year or two. Otherwise they work just like gift cards. You can't build credit with a gift card.

  • BedlamBedlam Registered User regular
    edited September 2011
    They are like Debit cards in that you can only spend what is on there. Some are refillable and if its worth a damn it will have a visa or mastercard or whathaveyou stamp so that you can use it online.

    None of it will count to your credit rating no. It wont be like a credit card at all in function.

    Bedlam on
  • Dr. FrenchensteinDr. Frenchenstein Registered User regular
    read the agreement, some of them have lots of fees associated with them if you don't spend it right away. I wouldn't bother putting money on it unless you don't have a check card, which would mean you don't have a bank account. Also, if you lose it, i'm pretty sure that it and any balance on it is gone.

  • amateurhouramateurhour One day I'll be professionalhour The woods somewhere in TennesseeRegistered User regular
    If it's a pre-paid visa or a mastercard you can register it online so that if it's lost it can be shut down and the balance given to you on a new card.

    as others have said, it does nothing for your credit rating, and I've never had one that started deducting money less than two years out, and even then it's been about $2 a month.

    If you're not actively trying to build credit or can't get a credit card, they're great for keeping online for sites that require a card (like itunes, xbox live, etc) so that you can buy stuff online without the risk of the card getting out there and someone running up your bill, or accidentally overcharging and ruining your credit by maxing out a card.

    However, I'm not sure if it's still the case, but the numbering system on the prepaid cards used to be different and a lot of sites wouldn't accept them as a revolving form of credit (like itunes, amazon, etc.) That may not be the case now though since visa and mastercard have kind of stepped more into the game there.

    are YOU on the beer list?
  • bowenbowen How you doin'? Registered User regular
    edited September 2011
    You're going to get assed out the butt in fines, its not worth it. You can get a better deal by opening a checking account at your bank and moving funds over to it as needed for online purchases with your Visa stamped debit card. In effect, creating a prepaid visa card.

    bowen on
    not a doctor, not a lawyer, examples I use may not be fully researched so don't take out of context plz, don't @ me
  • amateurhouramateurhour One day I'll be professionalhour The woods somewhere in TennesseeRegistered User regular
    bowen wrote:
    You're going to get assed out the butt in fines, its not worth it. You can get a better deal by opening a checking account at your bank and moving funds over to it as needed for online purchases with your Visa stamped debit card. In effect, creating a prepaid visa card.

    What are the fines now? Not disagreeing, just curious, because I was thinking of making the switch to a prepaid card online based on some articles I read online and it seemed like the way to go over opening another account.

    are YOU on the beer list?
  • bowenbowen How you doin'? Registered User regular
    edited September 2011
    Some of the smaller limit cards (like $300 or so) charge like $5-10 a month.

    So long as you already have a bank account and are meeting the minimum requirements (usually not hard, like $300 in savings or having both a savings and a checking account) then just opening another checking account will usually avoid the charges. And at the worst they're $5 a month. Usually credit unions don't even have those account fees so even better. I think wells fargo and BoA require a $300 savings balance, my bank just requires you to have a savings and checking account and another one in the area only requires $100 (but gives you no interest). This is all skeptical based on your local bank choices, of course.

    bowen on
    not a doctor, not a lawyer, examples I use may not be fully researched so don't take out of context plz, don't @ me
  • DruhimDruhim Registered User, ClubPA regular
    edited September 2011
    I think bowen is getting a prepaid card confused with a secured credit card. There are almost certainly no fees associated with what you're getting as your rebate. It's just a convenient way to send you a rebate without having to cut a check. And it only works superficially like a credit card. It is not a line of credit and it will not affect your credit rating at all.

    Druhim on
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  • bowenbowen How you doin'? Registered User regular
    edited September 2011
    https://www.mygreendot.com/greendot/

    This is a prepaid card. There are still fees out the butt. Secured cards rape you out the butt even worse, but are rated on your credit history. A bank card that's Visa or Mastercard will still, usually, net you no fees, as long as your bank doesn't charge you account fees, or the terminal doesn't charge you a fee (a lot of stores charge you $1 to use a debit card if you don't use the credit option).

    bowen on
    not a doctor, not a lawyer, examples I use may not be fully researched so don't take out of context plz, don't @ me
  • DruhimDruhim Registered User, ClubPA regular
    That has little to do with a prepaid card a company is going to use for a rebate. The card is just a convenient way of getting the money to the customer without dealing with checks. Any fees associated with loading the value onto the card are handled by the business.

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  • DruhimDruhim Registered User, ClubPA regular
  • bowenbowen How you doin'? Registered User regular
    I was talking to amateur directly, though, and in general for those wondering about prepaid cards. And some may just stick a dick in your butt and charge you a $5 fee every month regardless. A lot of prepaid cards are like this.

    not a doctor, not a lawyer, examples I use may not be fully researched so don't take out of context plz, don't @ me
  • bowenbowen How you doin'? Registered User regular
    Druhim wrote:

    Yes I know.

    not a doctor, not a lawyer, examples I use may not be fully researched so don't take out of context plz, don't @ me
  • DruhimDruhim Registered User, ClubPA regular
    Basically there's not really much reason to hold onto the money on the card. It's not going to help your credit and there may well be limitations on how long the value on the card will last for. It's unlikely there will be any fees associated with the card itself, so just use it like you would your debit card when you're shopping and use up the amount on the gift card first, then you don't have to worry about losing the card and whether you registered it (if that's even available) or the value expiring eventually.

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  • amateurhouramateurhour One day I'll be professionalhour The woods somewhere in TennesseeRegistered User regular
    Oh, it's kind of relevant, but one problem with the prepaid cards is that you have to know the exact balance of them. Like if you've got 43.19 left on the card and buy something for $50 at a store, a lot of cards won't process if the cashier just tries to run the card without doing a split payment and specifically typing in $43.19 and then telling you the remainder.

    Just FYI.

    are YOU on the beer list?
  • bowenbowen How you doin'? Registered User regular
    Yeah that is the downside to prepaid cards, though it's more of an alternative, and convenient form of payment rather than a predatory loan at that point.

    The linked accounts would net you better because you can transfer money to and fro with your own accounts and not have to pay $8 everytime you want to refill it. Not sure why people use the prepaid cards in lieu of a checking account or something, there are just way too many fees involved in it to really make it worth it.

    not a doctor, not a lawyer, examples I use may not be fully researched so don't take out of context plz, don't @ me
  • DruhimDruhim Registered User, ClubPA regular
    The simple answer is to not refill it. Just use it up and toss it once it's empty.

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  • BullioBullio Registered User regular
    bowen wrote:
    Yeah that is the downside to prepaid cards, though it's more of an alternative, and convenient form of payment rather than a predatory loan at that point.

    The linked accounts would net you better because you can transfer money to and fro with your own accounts and not have to pay $8 everytime you want to refill it. Not sure why people use the prepaid cards in lieu of a checking account or something, there are just way too many fees involved in it to really make it worth it.

    The best scenario I can think of is to set budgets for kids while not giving them access to big reserves of money, or for people that have problems budgeting their money. I personally was considering getting a prepaid card for online transactions to replace my debit card, but it sounds like it's not really worth it. I might look into opening a new checking account to use solely for online stuff.

    Thanks to everyone that responded, appreciate the advice. For the record, the prepaid card I'm getting from my rebate is an American Express. I can't remember if CoinStar machines will take cards or not, but I'm considering just taking the AE card and claiming the balance for an Amazon gift cert so I don't have to worry about any wonkiness with going over the limit of the card itself.

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  • bowenbowen How you doin'? Registered User regular
    Well, at least it wasn't discover.

    not a doctor, not a lawyer, examples I use may not be fully researched so don't take out of context plz, don't @ me
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