As many students make a great effortto pay college tuition, loans and other expenses, young people are findingthemselves establishing a line of credit that will follow them for the rest oftheir lives. New measures however,such as pre-paid credit cards, are offering new options and advantages.
Prepaid cards are similar to creditcards, but work somewhat differently.
With credit cards, money is borrowedfrom a bank or other financial institutions. PrePaid credit cards hold balances that are determined bythe cardholder. The cards usuallycarry a MasterCard or Visa logo and can be used wherever the emblems areaccepted. With a prepaid card, onecan loan funds onto the card and use that money to make purchases and receivecash.
“I think the theory is good,” saidChristopher Russell, junior fine arts major from Vivian. “You won’t over spend, which can causedebt.”
The cards are ideal for students,people who have a hard time controlling their spending, and/or have less thanperfect credit. With a prepaidcredit or debit card, one will never overspend funds, because withdrawals mustbe made up to the amount deposited into the account. The cards can be purchased via telephone, Internet, or atsome in-store retail locations.
In comparison to a regular creditcard, if a purchase is returned and refunded in a store, the amount refundedwill appear as a credit on the card account. In the instance that there isn’t enough money on the card toinsure a purchase, the transaction will automatically decline.
No line of credit however, isextended with prepaid cards. This simply is an indication that the spendinglimit is determined by the cardholder. In addition, since it is not a credit card, there are no financecharges, late fees, or accumulation of debt. Regulations vary from card to card, but in some instances,annual, processing and ATM withdrawal fees may occur.
“I think that prepaid credit cardsare good, especially for college students,” said Charles Riley, juniortherapeutic recreation major from
Orlando. “You spend only what you want.”
There are several prepaid creditcards available, primarily distributed by MasterCard and Visa. MasterCard offers several reload ableprepaid cards including the Ecount Card issued by Bank One, and the BestPresent MasterCard Reloadable Card issued by Key Bank for businesses and itspartners. Visa offers a variety ofprepaid and gift cards including the Gift, Buxx, Travel Money, and Payrollcards.
One of the most popular prepaidcredit cards is The Rush Pre-Paid Visa® Card, established by hip-hop mogul andentrepreneur Russell Simmons. Itis
a debit card designed to save timeand money. The card can be used atover 800,000 ATMs and millions of Visa locations worldwide. Customers also have the option toreceive cash back rewards.
Once a person applies online or viatelephone, the personalized card and membership package will arrive within tendays. There is no requirement topay upfront, because the activation fee will be deducted from the customer’sfirst deposit.
Direct Deposit compensation from anemployer, Bank Account transfers, Social Security and Benefit payments, andMoneyGram and Money Order payments are ways to load funds onto the RushCard.
In addition to the normal use of theRushCard, the program also has special offers for customers on Dental Plans,mobile phones offered through RushMobile, Gateway Computers, and the “Get YourHouse in Order” Initiative.
For more information on the RushPre-Paid Visa Card, visit www.rushcard.com or call 1-866-Rush-Card.
