Reloadable Credit Cards

Reloadable credit cards are a fantastic tool that can be used time and time again. Reloadable is a term that simply means you can add to the card's balance then use the balance, and add more to the credit card. It is important to note that these are not traditional credit cards but are more like gift cards. They do not offer you a line of credit to borrow against, since you can only spend what has been deposited on the card.

Reloadable Credit Card

Buying reloadable gift cards like this can be easy to do. Many retail outlets sell them, as do banks. Yet, there are a few key points to keep in mind when buying them:

• Where can they be used? Some reloadable cards can only be used in certain areas or for certain merchants. Merchant-based cards are a good option if you plan to use that location regularly. For example, a reloadable card for a department store you visit every week can help you to stay within budget since you can control how much you add to the card to spend.
• Are there fees? Many of the Visa cards, MasterCards, and American Express reloadable cards available feature fees for purchasing them. Fees range widely, but these have to be paid at the time of purchase. Consider this part of the cost of using the card.
• Does the card decrease in value? For some of the cards available, if left unused, the available balance may decrease over time slowly. For example, some cards feature a decrease in value on the card by $2 to $5 per year that the card is unused.
• How are cards reloaded? In some situations, you can visit the same merchant to add to the card, such as your local bank. In other cases, you may be able to reload the cards online, through the card's website. Find out before you invest in these cards to insure it is feasible to do so.
• Will it be appreciated? When buying reloadable cards for friends and family as gifts or to give them a card to use for purchases, be sure to consider how the card can be spent. Most are nonrefundable, which means that if they do not like the location they can spend it in, they may not use it.

All information regarding the card, including fees, should be stated on the back of the card and be available to you at the time of purchasing the card.

One of the best benefits of using reloadable credit cards is you can save money while using these credit cards instead of other forms of credit, including unsecured credit lines.

• Don't pay finance charges: Since you do not carry a balance with the company each month, there are no finance charges to pay for using these cards. You still have all of the freedom of using the cards as a credit card. The Visa and MasterCard cards can be used online or at most retail outfits.
• Use them to budget spending: Use a reloadable card for groceries or other shopping each week. Place only the amount you wish to spend each week onto the card then limit yourself to using just this amount. Do the same with children in college, teen shopping needs, or entertainment money for the month.
• Use them to manage travel budgets: Those who travel can use these credit cards safely in many locations, even some overseas areas. Place only the amount you wish to spend during your trip on the card. This keeps you from overspending on the trip.

Reloadable credit cards are a good investment when used properly. Keep in mind the cost of fees when obtaining them. Use them regularly to see the help they can offer to budget management.

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