Know the Disadvantages of Prepaid Credit Cards

Prepaid credit cards are more or less like debit cards. Just like a debit card, a prepaid credit card is set up with an amount of deposit, which can be used, to make your payments. You do not actually get any credit in this system, and your payment limit can not exceed your exceed your existing deposit. This means that you do not have any chance of exceeding your capability for payment.

Just like all good things, prepaid credit cards, suffer from a few demerits as well. Some of these are as follows:

1. A major disadvantage, which is evident in case of a prepaid credit card, is that you are required to pay a minimum amount of fee, to maintain your prepaid credit card account, which is not there in case of an ATM cum Debit card. This is an additional expense, which needs to be paid.
2. Another disadvantage, that a prepaid credit card has, is that you have to keep a track of your balance amount, which means, that every time you go out shopping, you need to check your available balance, since you are not allowed to exceed your available balance.
3. Apart from that, the credit card company may charge you some additional fees in the form of transaction charges, which you need to pay every time you make a payment. Such charges are usually not imposed in case of ATM cum Debit cards. This makes it a more expensive option as well.
4. Another important feature of the prepaid card is that online purchases may be difficult in case of a prepaid credit card. This is because, in most cases, online dealers do not accept prepaid credit cards; and it makes it all the more difficult for an average customer.
5. You may also face a lot of difficulties, in the process of reloading your account. This may be because; the prepaid credit card company may not have its loading centers at all the places. So, if the loading center is far off from your residence or place of work, then in that case, you face an additional difficulty.
6. Another disadvantage of a prepaid credit card is that there is always some scope for exploitation.  A company may charge you for products and services, which you may not have received at all, or simply you may be overcharged for such products or services.
7. Another feature, which is of concern, is that you always need to carry small amounts of cash, every time you make purchases. This entirely negates the purpose of a credit card.

Prepaid credit cards also have their share of advantages as well. Therefore it is up to you to make your choice after going through all the pros and cons.