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Last Updated: Jul 2nd, 2008 - 21:15:22 |
(NUI) - Credit cards are dangerous. In fact, credit card balances in America average $7,000, and interest rates average 29 percent. With personal bankruptcy at an all-time high, debt seems to be consuming the nation.
Many economists say consumer debt drives the economy. This theory states that since a person has to keep working to pay off debts, employees work harder to make more money to make their payments.
But, according to certain money experts, economies can work just as well without debt. They say that consumers using cash help the economy just as much as consumers using credit because they are still making purchases that support businesses.
Even a small amount of debt can give someone feelings of hopelessness. It doesn't take much to dig into a hole. One or two missed payments can start a cycle that seems impossible to stop and destroy someone's credit. Then, interest builds up and just the minimum payments can be hard to make. Plus, many items bought on credit can decrease in value significantly before they are ever paid for.
Some people try to avoid debt and interest by "cutting up" their credit cards. Unfortunately, with today's technology, many purchases require credit cards. Plus, credit cards are replaceable, while cash is not. Cash is easily lost or stolen, and many people prefer not to carry cash or choose to carry very small amounts.
So, if you have bad or no credit or just want to stay out of debt, how do you get the convenience of a credit card while avoiding pitfalls like credit checks or interest charges? One new option is prepaid credit cards, which, unlike secured credit cards, are not charged any interest and don't require monthly payments.
One company called Stored Value Marketing offers a prepaid Visa or MasterCard for $69.95. There is a $19.95 annual fee, and you can start with a minimum of $20.00. It's easy to add more money as needed, and you can load up to $5,000 on the card.
Prepaid cards have advantages over bank debit cards, like rental car availability, and don't require a checking account.
These cards allow consumers to have complete control over how much money is accessible through their account. People can put the exact amount they need on the card. This feature helps keep cardholders from spending too much and from falling into debt.
The cards are sponsored by Visa and MasterCard and are accepted at all locations. Plus, when someone uses this type of card, the money is spent and they do not have to dread their bill at the end of the month.
For more information on prepaid credit cards, call 1-888-982-2737.
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