If you have a history of bad credit and are unable to obtain a mainstream credit card, then prepaid credit cards may be just the answer you are looking for.

First of all, although prepaid credit cards are accepted at any retail outlet where the credit card logo is displayed, strictly speaking they are not a credit card, as the issuer provides no credit facility to you. Rather, your spending limit is determined by how much money you have on the credit card at any given time.

Once the amount on the card has been spent, the cardholder can either buy a new prepaid credit card or elect to transfer money on to the existing card, depending on the card program.

Although prepaid credit cards sound very like debit credit cards, the two should not be confused. In the case of debit cards, any purchase for goods or services you make will automatically be charged to you bank account for which the debit credit card has been issued. However, purchases for goods or services made on prepaid cards goes off the balance already on the card.

Because of the prepaid nature of these cards, they have several benefits, such as: