When looking at card advertisements, the promise of no overdraft fees, over limit fees, interest charges, or penalty fees can look very tempting.  Often such claims are given to prepaid debit or credit card offers.  But in reality, these claims are merely stating the obvious.  These are the primary traits of a prepaid card and are not specific to any card issuer.   

Other claims, such as ‘certain approval’ or ‘no credit check’ are also obvious aspects of prepaid credit and debit cards.  Since prepaid cards require you to have the specific finances available, it is sometimes difficult to call it a credit card.  You are not essentially borrowing any money from the banks, but labeling it as a credit card is more attractive to a society at large. 

Prepaid cards are also sometimes tempting to consumers who have had credit problems.  Most prepaid card issuers do not report to the credit bureaus.  Because you are basically spending money you already have, there is really nothing to report.  However there are some prepaid cards available that can help build your credit.  This feature is sometimes very useful for those who want to start building credit but cannot do so by conventional ways. 

It is estimated that a quarter of Americans have never used credit.  These individuals usually pay for their monthly expenditures in a timely fashion without anything negative being recorded on their credit scores.  But these consumers also have nothing positive to note on their credit as well.  Without a credit history, it can be very difficult for these individuals to obtain a loan or apply for a mortgage.  Having no credit can be just as unbeneficial as having bad credit. 

Prepaid cards that report to the credit bureaus usually report any activity to PCBR.  Card holders will typically establish an online bill paying system linked to the prepaid card.  Prompt payments of bills will be recorded with PCBR.  The FICO recognized bureau can help those who have difficulty obtaining credit. 

Some cards that provide this service are the Eufora, Ready Debit Visa, and Account Now prepaid cards.  Consumers should be aware that, besides some exceptions, the majority of prepaid cards will not report anything to the credit bureaus.  If your soul purpose is to establish or rebuild credit, a secured card would be a much better option.