Published: January 3rd, 2013 • Last Updated: January 7th, 2021
Author: Ross Taylor on AskRoss.ca

Consider a secured credit card if you need to build or repair your credit

There are many reasons why you might wish to own a prepaid credit card. Typically we think of people who have a bad or no credit history, but the need can go far beyond this demographic. I myself have a prepaid visa card, and I can assure you my credit history is excellent.

In today’s world, having a credit card in your wallet is a necessary convenience. Try exiting a major parking lot without one. Or, try to check into a hotel, book a flight, or rent a car without one.

In my customer base, I see them used mostly for:

• Online purchases
• As a starter card for teenagers learning lessons in the responsible use of credit
• For recent bankrupts who must have a credit card to go about their daily business

Prepaid credit cards will never show up on your personal credit history. They are a payment medium, nothing more. You make a deposit whenever you like on the card, and as you use the card, your available “credit” declines. You simply add more money to the card whenever you need to.

If your goal is to rebuild or establish your credit history, you should consider a secured credit card instead.

Visa gift cards are not nearly as effective as an actual prepaid Visa or Mastercard. Their acceptance can be limited and unpredictable.

Fad cards such as celebrity credit cards are simply not worth the money. There is a website with info about Kim Kardashian’s foray in 2010 into this business, and her hasty exit when she realized the money gouge her fans were being presented with.

Is there a credit card for you if you have bad credit?

Recently, a client whose personal credit history is smashed was lamenting the lack of reasonable choice in the market. He travels frequently on business and found the costs and fees associated with many cards were unreasonably high.

But now he seems to have struck gold with the BMO Prepaid Travel Mastercard.

This card has all the bells and whistles you would expect and need and has the added cache of being issued by one of Canada’s five largest national banks, the Bank of Montreal.

And best of all, there is only a one-time annual fee of $6.95. Check it out at the BMO website.

This product is a winner.

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