Tips for Using Pre-Paid Credit Cards Wisely

Prepaid credit cards are convenient for those people who do not have access to traditional credit card approval, because they are available to people who even have terrible credit histories and a really low credit score. Normally credit card companies want to reduce their risk – which mean the risk that those they lend money to will fail to repay the debt – by using credit scores and other means of predicting how responsible the cardholder will be. But that is no necessary with a prepaid credit card because the cash that backs up the debt – and covers any credit card charges or monthly payments due on the outstanding balance – is already on deposit.

There is no guesswork regarding whether or not the cardholder will have enough money saved to cover the credit card balance, in other words, because the cash needed to do that is already in a secure account. That makes it easy to get a credit card through the prepaid credit card approach, but what many consumers don’t realize is that it also offers them a golden opportunity to repair their credit, raise the all-important FICO credit score number, and take significant and intelligent steps toward getting their own traditional credit card account with a major card from Visa, Mastercard, American Express, or other recognized card names.

Getting the prepaid card is the first step, but then using it responsibly takes care of the rest. Just use it as you normally would to do things like shop or pay bills. But be sure that you have a prepaid card whose issuing company tracks your credit and then makes regular reports and updates to the big three credit reporting agencies. That way if you have good credit habits and pay your bills on time, you get noticed for that. The more credit you build, the faster you can repair your credit and raise your score, and soon you’ll be well on your way to approval for your own non-secured credit card.
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What Are the Benefits of Co-Branding in Credit Cards?

Co-branding is a marketing strategy in which two companies form a partnership to achieve greater brand recognition, reach larger markets, and increase consumer spending. The co-branding of credit cards is an effective way for businesses to achieve these goals.

Appearance

1. Co-branded credit cards bear the design of the partner company as the background of the card, while the card issuer's logo remains in the corner. Some examples of this are the Shell Gasoline MasterCard and the Jet Airways Visa.

Benefits to Businesses

2. Co-branding is successful when both members of the partnership bring value to the new product. Thorough market research is necessary to determine what products will catch on with consumers, but if co-branding is done properly, both partners will gain business. For example, MasterCard will gain loyal Shell customers and vice versa.

Business Risks

3. Co-branding is widely regarded as an easy, attractive strategy for a business to pursue to increase profits. The risk in this strategy is that a company could enact an ineffective partnership, which would result in wasted time and resources. For example, while supermarket co-branding with credit cards is a popular in Europe, the idea has thus far failed to catch on in the U.S.

Consumer Benefits

4. Co-branded credit cards offer consumers a range of advantages related to the products or services of the business partner. For example, the holder of a Jet Airways Visa Card earns mileage points by using the card, which results in free airline tickets or upgrades.

Consumer Drawbacks

5. There are no major drawbacks to the consumer in holding a co-branded credit card versus a standard card, however, some co-branded cards, such as the Shell Gasoline MasterCard are subject to annual fees.

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