Prepaid Credit Cards and Debt

Debt is rising in Ireland due to the credit card crunch started in the US. A lot of Irish residents are using their credit cards to supplement their income to pay for expenses. Several have in the past and present used credit cards to purchase items they don’t need and can’t afford. With the increasing amount of debt residents are looking for ways to help their bad credit scores.

Bad credit can be created by arrears, missed payments, late payments, IVA’s, or bankruptcy. These arrears are going to lower the credit score and make getting mainstream loans and credit cards difficult. In order to rebuild a credit history and the scores to a more favourable light, those who have suffered from debt are using prepaid credit cards.

Prepaid credit cards offer more control and the convenience of credit cards. For example you place the amount of money in the account that you want. This means you can only use the money that is there rather than overspending. By using the account to pay off monthly expenses like groceries, energy, petrol, and other items you have the income for, your scores will increase.

You also don’t have to worry about interest. Regular credit cards have interest around 20 to 40 percent for bad credit credit cards. The high amount of interest can have a person right back in debt. The prepaid cards don’t have interest which makes it easier to use the cards without fearing debt. They do have start up fees, transaction fees, and reload fees. You can keep these fees to a minimum by using the card sparingly.

So if you have just gotten out of debt and need to repair your credit, you might want to consider the prepaid card option from a number of the Irish credit card companies and banks.

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This entry was posted on Tuesday, August 12th, 2008 at 2:13 pm and is filed under Types of Credit Cards. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.