Pre-paid debit cards versus ATM cards

All cards have their unique benefits, and neither type of card is necessarily better than the other. What makes a card best, is if it fits the needs of the holder. There are times; however, when it might be better to use a credit card or to use a prepaid debit card (ATM card) instead.

If you're making purchases online, definitely use a credit card. If you're making any purchase where you might be concerned about your ability to get a refund, again use a credit card. With credit cards you can always ask to reverse the charge, and even if fraud was committed the most you'll be liable for is $50. With a debit card, however, your bank account could be wiped clean and recovering your money can be a long, arduous ordeal - if not impossible.

For day-to-day use, it's handy to use a prepaid debit card, or commonly referred to as an ATM card. You needn't worry about getting payments in on time to prevent interest charges. But if you forget to annotate every purchase made with a prepaid debit card, you could risk bouncing a check which will cost you returned check fees.

In an emergency when bank account funds are low, a credit card can be a life saver.

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Secured credit cards

Secured credit cards are perfect for people with bad credit or bankruptcy on their credit report. A secured credit card reported to major credit bureaus can prove your credit worthiness to creditors, which can lead to better credit terms and being offered more credit. It's a great way to rebuild credit.

The best feature of a secured credit card is that it can help prevent debt interest, because you pre-pay the amount(s) you want to charge.

Have a teen or college student in your home? A secured credit card is an ideal way to make sure your teen or student has a way of getting cash for an emergency situation. And, you don't have to worry about over charging.

You can also use a secured credit card as a financial learning tool for your children. You can give them the card, you deposit the amount you want available, and each time your child charges you establish your own monthly re-payment system, with interest. Of course, the interest goes in your pocket, and your child learns how to treat a credit card with respect.

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