Pre Paid Credit Cards

[Elbow]

Hey,

I was wondering if those pre paid credit cards can help you build credit? Such as the Western Union ones with MasterCard. You apply for them, they send it, you go to an agent and pay the amount to be on it up front. Not the gift cards.

Just a thought. I am 18, trying to build good credit, but don't want to end up in debt. I cant get a regular credit card yet and don't want to apply for them because I saw on here it can hurt your credit.

Anyone used these cards before? Thanks.

Simon

[gobraves00]

no, it wont help cause no one is giving you a line of credit, your giving it your self.
capital one is pretty easy to get.do you not have a car note?

[thepolecat]

to build credit go ahead and apply for a new credit card, not a prepaid. Make sure to stay below 50% of the card limit. I have a card w/ a $500 limit just for building credit and I have had that since I was 18. Also, go out and buy something like a living room set, a diamond ring for your girls, or something equal to that (a newly used car perhalps) and put it on store credit. Even if you have the money up front it will help to build the credit. Or, with no other options, if your parents are paying for a car have them put your name on the lease/bill.

G/L building credit, it can be your biggest help or your biggest downfall.

[Elbow]

What's a car note? I can't find a credit card available to someone with no credit, anyone know of any? Thanks for all the help!

[JennB]

Are you a student?

Car note = car loan.

[Elbow]

Not a student yet, will start next month. I don't have a loan. Thanks

[silver]

I am not sure if what you are talking about is a secured credit card, but Getting a secured credit card is a good way to build credit up.. I think you can find some where the minimum is $200, you pretty much open a savings account through their bank with the minimum amount they require and its collateral against the credit card they will issue you. You still get a statement each month with your minimum payment and you get charged interest and all that stuff like annual fees, which the interest might be a little high cause of new credit but usually the annual fees are resonable.. usually after a year you will get offered a higher limit credit card and thats when you can close the savings account and get your money back and since it was a savings account you will have been gaining interest on it too...

I had filed a bankruptcy about 3 years ago and have had trouble coming back out of it, couldnt get any credit at all and I had to resort to a secured cc. I have only had it a few months but since having it I have had things start looking up as far as being able to get credit in other things that I have been trying for a while to get.

Just dont be stupid. Once you have established credit dont go start applying for credit cards at your favorite clothing stores or ish like that.. all you really need is a major credit card maybe 2 that you never use and if you do they are paid off monthly, and that first time you CANT make more than the minimum payment you should look into cutting the card up.. credit is something that isnt something to screw around with, but you need it to buy a house one day or to get that new car. Its when people start getting credit cards at target, and american eagle, or express that people start digging theirselves in a hole.. If you need to apply for a credit card at those stores to be able to buy things, then you dont need it or have the wrong mentality of having credit.. but that is just my experience that i like to pass on, ish I have learned from my own mistakes, lol..

[silver]

What's a car note? I can't find a credit card available to someone with no credit, anyone know of any? Thanks for all the help!

Oh yeah... my secured credit card is through orchardbank.com it can take up to about a month or so to get everything set up also just fyi

[FNR32]

You can get a card at 18. I got my amex at 18. Id say apply w/ Cap One like the others have stated. Or start w/ a store card. I think my very first card was with Dell, i bought a cheap ass computer and paid it off over 3 months. Repeated it a few times. Next was best buy, then amex and so on. Just be careful. You only NEED ONE major credit card, if you get a visa, master card, thats enough. You can have too much available credit at your disposal and that can hurt your credit as well.

[silver]

Yea.. I think my first credit ever was with Dell also... Just I hate telling people to try to get credit through things that are material or for pleasure per say (ie electronics, clothing stores, etc) mainly becuase I got bad with my credit and dug myself in a hole and it was things like that that brought me under.. which i why I say to just start out with a major credit card.. I have a very strong mentality now that with the one credit card i do have, if I dont have the cash for it 2x in my bank then I dont need it and thats if I am paying cash most the time.. and I only charge to my card just to keep something revolving and to build my credit back up

[FNR32]

Yea.. I think my first credit ever was with Dell also... Just I hate telling people to try to get credit through things that are material or for pleasure per say (ie electronics, clothing stores, etc) mainly becuase I got bad with my credit and dug myself in a hole and it was things like that that brought me under.. which i why I say to just start out with a major credit card.. I have a very strong mentality now that with the one credit card i do have, if I dont have the cash for it 2x in my bank then I dont need it and thats if I am paying cash most the time.. and I only charge to my card just to keep something revolving and to build my credit back up
I feel your pain. I ran dell up to 5K (1K past the limit) Best buy up to 3 and the amex to 7k all before i turned 20. I didnt file BR, but i was pretty close. I had to grind my ass off to pay that off, and go to school at the same time. But i had the cleanest car of anyone else i knew lol :bump: :bump: :bump:
It will get you in to deep shit if you arent careful. I was thinking "HEYYYYYYYY FREE MONEY, LEMME GO BUY THOSE VOLKS $ SHIT I WANTED", then i got the bill and was like "wtf is this, i don't owe this, i put it on my credit card" bwhahahaaha

[thepolecat]

You can get a card at 18. I got my amex at 18. Id say apply w/ Cap One like the others have stated. Or start w/ a store card. I think my very first card was with Dell, i bought a cheap ass computer and paid it off over 3 months. Repeated it a few times. Next was best buy, then amex and so on. Just be careful. You only NEED ONE major credit card, if you get a visa, master card, thats enough. You can have too much available credit at your disposal and that can hurt your credit as well.
Definatly a good point- once you pay off a store card call up and cancel it.

[RandomGuy]

Definatly a good point- once you pay off a store card call up and cancel it.
that I didnt know LOL i have mad cards opened up in my name...
stores I dont even go to... but my credit isn't so bad thus far, getting a house within a month or two.

[4dmin]

get a car loan or a dept store card... those are pretty easy to get. get one use it for gas or something like that and pay it off each month; before you know it you'll have good credit.

[Elbow]

Yeah I was thinking about finding one to use only for gas and phone cards because my cell phone is pre paid Verizon. I want to be able to pay it off every month. I'm not looking to build credit to buy items yet for pleasure but need credit for later in life and want to start now. I REALLY REALLY REALLY don't want to be in any debt. Thanks for all the help, I am going to look at some cards and secured credit cards as well. Thanks!

[eViLMunkey]

Hey,

I was wondering if those pre paid credit cards can help you build credit? Such as the Western Union ones with MasterCard. You apply for them, they send it, you go to an agent and pay the amount to be on it up front. Not the gift cards.

Just a thought. I am 18, trying to build good credit, but don't want to end up in debt. I cant get a regular credit card yet and don't want to apply for them because I saw on here it can hurt your credit.

Anyone used these cards before? Thanks.

Simon yeah pre-paid cards dont help you gain credit, but to me it keeps you from spending more than you have. I use one to say my bills and insurance

[quickdodge®]

no, it wont help cause no one is giving you a line of credit, your giving it your self.


pre-paid cards dont help you gain credit,

Wrong. I have Netspend pre-paid Master Card and Visa. I use them only for online and other "over the phone" payments that aren't bills with major companies. Usually, you are right. But these CC companies will, for a small fee, report to the credit bureau for you. Netspend charges about $4/month. Later, QD.

[VegetaRules]

Like Silver posted you can goto orchardbank.com & apply for a CC that way. They specialize in giving people chances to rebuild, or establish credit.

Now I've had like 4 CC when I was 19-ish, yeah I was trippin, lost my job & had to repay the accelerated fee's tho I didn't spend that much. Now when I went to rebuild my credit, no bankruptcy, just alot of huslting, & payment arraingments to clear them all off.lol

Now the orchardbank people will give you a card with a $300 limit - thier $72 annual fee. Now they charge $39 for their processing fee, but if you just wanna start shyt off thats decent way to do it, They report immediately, & the monthly bill is $15.

Now if you wanna get a car loan, & can't goto the dealer, try Roadloans.com I bought my last car from Keebs( a member on IA) with rebuilding credit mode in full effect.

Now they'll give you at least $10,000 & do offer gap insurance, so you're protected from having to owe them cause their interest rate is high, buuuut after 10 conesuctive payments you can refinance to get lower note, then work it out from there that way.

These are just options, & not a Vegeta's guide to credit. lol You can try one or both ways, but I'll tell you this, it's not easy building credit, but it's easy fing it up, & harder to fix it, than it was to f it up.....Vegeta

[Extrememustang]

My first card was a capital one, I had no credit and they gave me a $200 limit. One year later I refinced my car that I had 6 months and my credit was so good I got the title while still paying on the car.

[Sushi]

My new bank offered me a credit card with a 500 dollar credit limit. I use it on purchases like tires and things I can pay off fairly quickly.

[eViLMunkey]

Wrong. I have Netspend pre-paid Master Card and Visa. I use them only for online and other "over the phone" payments that aren't bills with major companies. Usually, you are right. But these CC companies will, for a small fee, report to the credit bureau for you. Netspend charges about $4/month. Later, QD.


Oh I'll look into that one, I'm w/ Green Dot right now... like it so far...

[Jaimecbr900]

Paying off credit cards= good idea. Closing all your accts after you pay them off= not always a great idea if you are trying to build your credit file.

The credit scoring formula by all 3 repositories is a closely guarded secret. We do see patterns and use those to advice people as to what to do. One of those patterns is the limit to balance ratio. Part of your credit score is derived from that ratio. They basically take outstanding balances and measure it up against the high credit limits of all your creditors. They come up with a ratio which in turn sometimes shows if you're "over extended" or not. This is where the "stay below 50%" advice often heard. Sometimes it's actually more like 33%, but it's good advice regardless.

So in essence, if you close all your paid off accounts you are widdling down your available HIGH limit amounts and thereby possibly hurting your credit score in the process.

Example:

You have 5 CC's and a car note.

2 Visa- with a $1000 limit and $300 balance
2 MC- with $1000 limit and $500 balance
1 Amex- with $1000 limit and $300 balance
Car loan for a $25k car with a $23k balance.

Your pay all your bills on time and have a 700 score right now.

You pay off 2 Visas or worse....transfer those balances to another card.

You then have:

2 MC- with $1000 limit and $500 balances
1 Amex- with $1000 limt and $300 balances
Car loan with $23k balance still.

You suddenly have less number of cards, but your scored DROPS to say 670. Why? (BTW, these are all rhetorical numbers and are only used to show an example.)

So by paying off the 2 credit cards and CLOSING them, it watered down your ratio of HIGH credit (or available credit) to the balance amounts because you STILL have BALANCES, you just have LESS High credit limits to do the ratio with.

Follow that?

So it would be smarter, for credit score purposes, to have paid off those accounts BUT LEFT THEM OPEN because you would have $1300 worth of balances vs $5000 worth of high credit limits as opposed to $1300 worth of balances vs $3000 worth of high credit. The ratio of the first is better than the second. Get it?

So your credit SCORE would be better had you paid those two CC's off and left them OPEN vs paying them off and CLOSING them.

This is the reason why it is possible to have a middle of the road score by being "maxed out" vs a stellar score if you keep the balances sensible. I've seen people who have never had a single late payment on any account, yet have mediocre score because all their accounts are maxed out. They may pay on time, but that's not the only criteria bureaus use to derive your score. Timely payments weighs heavily and is the most drastic of the determining factors, but it's not the only one. Remember that.

Another problem I've seen often, and it may relate here, is INQUIRIES. Too many can and do negatively affect your score because in the scoring models used it counts as creditors ASKED for credit but they DENIED you. Most of the time that is far from the truth, but that's how it goes into the formula that calculates your score. It's very unfair, but that's the way it works. This is why you don't want every Tom, Dick, and Harry pulling your credit 50 times. It can and does screw up your credit score negatively.

My long :2cents:

Hope it helps. :goodjob: