Preloaded credit cards are handy for a lot of different situations. Because you pay for your purchases in advance, they usually don't require credit checks. They can be used in the same way traditional cards can be used, so they're a great way to purchase things online, pay bills or make reservations. You can also use them to teach your teens how to shop responsibly and build credit. There are many reputable preloaded credit card companies, but there are also some that take advantage of consumers by imposing high fees and restrictions. Knowing what to look for will help you choose the best card.
Step 1
Decide what type of preloaded credit card you want. Choose between open loop and closed loop accounts. Open loop cards contain logos like Visa or Master Card and can be used anywhere those credit cards are accepted. Closed loop accounts are only valid at certain places, like reloadable gas station credit cards.
Step 2
Contact your bank or financial institution first. Ask them about any preloaded or secured credit card deals they may offer. Often banks can offer you added benefits like the ability to tie your card to your bank account or protection against unauthorized purchases.
Step 3
Find out what cards are available from local retailers. You can purchase preloaded credit cards from most department stores and even some gas stations, grocery stores and convenience marts. Be sure to read the terms before making your purchase.
Step 4
Evaluate the features of your preloaded card. Look for a card that is reloadable, that has no or low usage fees, that has a reasonable expiration date and that offers protection from lost or stolen cards. Find out about daily spending limits and the ability to use the card at ATMs. Ask if you will receive usage statements.
Step 5
Determine how you add funds to your card. Some preloaded cards allow you to transfer funds from your bank or refill the card online, in-store or over the phone. Other cards do not allow you to refill them or charge you to do so.
Step 6
Purchase your card and add funds to it. Activate and use your card as you would any other type of credit card. Keep track of your purchases to avoid overdrawing your account. If your card has a PIN number, keep that number secret and separate from your card.
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