Canadian Web Site Says Prepaid Credit Cards are Good for Immigrants and People with Credit Problems

by Mercator Advisory Group 0

The Green Sheet ran a piece this week by a Canadian Web site that touts the benefits of prepaid cards as a credit card substitute, but limits the possibilities when it comes to prepaid cards. The article says that cards are good for people with bad credit and immigrants with no credit history. While these things are true, the article builds on the notion that prepaid cards are a form of a credit card.

Prepaid credit cards basically are form of credit cards which unlike the other credit cards are secured. It means that the amount deposit should be according to your requirements on this credit card and then have to spend accordingly. For this reason it is named as prepaid credit cards, you are only to use as much money as you have in your deposit account; as soon as you reach your limit by using up all your credit, you are supposed to deposit more credits in your account.

This is too limiting a view, because it presents prepaid cards as a transactional tool for narrow groups of consumers. Mercator has long held the view that prepaid cards, properly used, can be a financial tool that consumers can use for budgeting, directing spending, and even as a savings tool across the socio-economic spectrum.

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