05.05.09 | Take Control with a Prepaid MasterCard
We all want to be like Kelly Clarkson, Miss Independent, and do things on our own. We want to hang out with the friends of our choosing, come home when we see fit, and basically do whatever we want, short of breaking the law of course.
I imagine it’s especially tough for those students who live on campus during the school year and taste freedom, only to come home for the summer and adhere to curfews and required phone calls to Mom as to your whereabouts. But that’s only half of the independent puzzle. Financial independence is also something we all strive for.
When I was first starting out my Dad had me take out a $500 personal loan I didn’t need. I was the primary borrower and he was the co-signer. He gave me the $500 and instructed me to make the monthly payments each month for one year until the debt was paid off. He even kicked me the seventy-seven dollars in accrued interest on the loan. Can you say best Dad ever! Needless-to-say those 12 months of consistent, on time payments catapulted my FICO score and launched my independent plastic career.
Unfortunately with the current state of affairs many parents can not co-sign a loan for their children, which is why a prepaid visa card serves as the perfect do it yourself alternative.
The Vision Silver Prepaid MasterCard, issued by MetaBank, is a stored value card designed for those who may have difficulty in obtaining a standard unsecured credit card on their own. Prepaid cards require payments in advance, which are then used to offset future purchases made with the card. At this point you may be wondering, what’s the point then? If I have the cash upfront I can just pay for the item in the store, which is true, but that doesn’t help you establish credit which is our aim.
It is important to note that there are some fees associated with this card. There is an account set up fee of $9.95 (waived with direct deposit loads) and a low monthly participation fee of $3.95. Basically you are paying to establish credit, just as I did with the $77 dollars in interest on the $500 loan, and just as I do when I make my monthly credit card payments with a 12% APR. There is no additional charge for U.S. purchases.
It’s also common for stored value cards to lack benefits; however, this card does offer a free bill pay service (for the first seven transactions each month) and access to a free credit builder service, which reports bill payment information to a national credit reporting agency on your behalf. I know that some of you feel like you are doing it alone, and that your parents are either not willing or able to assist. You are alone no more.
For scholarshippoints members enter code PREPAIDME for 15 magical points to use toward monthly scholarship opportunities!
The Student Credit Blog is sponsored in part by:
PREPAIDME
May 5th, 2009 | #
I do prepaid cards b/c I get them for free stuff, but when you get to having $2 left, then what? It sucks! I mean, when you’re that low…otherwise it’s a pretty cool piece of plastic.
May 6th, 2009 | #
This sounds very convenient but it does not help build credit. However, there are many other ways to do so, so this wouldn’t be a bad idea at all.
May 7th, 2009 | #
Prepaid cards has its advantages and disadvantages. They are useful and helpful to those who want the payment out the way ahead of time, but I agree with the Pricilla that it does not help you to build up a good credit, especially if you’re looking for a loan!
May 7th, 2009 | #
If someone can prepay on a card, than why shouldn’t we just apply the same idea with our own savings account. You even have to pay a fee and there is interest, so you loose money. The only plus, I guess, is that it could be helpful to those just beginning to build credit history. Otherwise, there are better ways.
May 7th, 2009 | #
WOW
May 7th, 2009 | #
PREPAIDME
May 7th, 2009 | #
Actually, it does help you build credit PRICILLA. Read paragraph number 6 carefully and you’ll see what he means by “paying to establish credit”
May 8th, 2009 | #
Yea prepaided is great for when you don’t want to spend more money than what you have, but what happens when you go over that? If you can’t handle your own money then don’t bother trying to find easy wyas to spend without being responsible. If you have money you need to learn how to budget and spend wisely.
May 8th, 2009 | #
This is fantastic for those who need credit but can’t have trouble spending too much.
May 9th, 2009 | #
prepaid me
May 12th, 2009 | #
As long as it can bulid your credit, thats a great idea!
May 12th, 2009 | #
i think its a good idea and wouldn’t mind one
May 13th, 2009 | #
i think it would be a good idea but i’d rather stick with my card
May 13th, 2009 | #
I think it would be great if it had no monthly fees.
May 20th, 2009 | #
i think it would be better if we didnt have to pay monthly
June 1st, 2009 | #
Nice if you already have money to put on it. Problem is that it doesn’t benefit your credit…. but it is nice to have a place to store your cash. I have had a few of these before and the thing is that many have MAX limits to how much money you can put on them. Not only that but they all hava various fees. Some are only for each time you fill the card, some actually charge per month maintenance. Um…. Maybe it is best off to have a debit card from a bank.
June 10th, 2009 | #