Consumers are working hard to clear up credit card debt and find ways to improve their credit scores during these tough economic times. Many consumers are trading in traditional credit cards and opting instead to use only debit cards for their purchases to finally get some real debt relief. Another way is by getting prepaid credit cards, which work similarly to traditional credit cards and can improve your credit score, but the difference is you first need to add money to your account before you can use the card. There is no line of credit involved with these prepaid cards. You only have access to the money you put in.
The good news is that people can help improve a bad credit score by responsibly using these prepaid cards in place of traditional credit cards. The bad news is that there are unfortunately companies who are less than ethical and have found a way to scam consumers out of large sums of cash under the guise of giving consumers much needed credit card debt relief. The companies manage to pull such scams in a number of ways.
Big Money – Bad Card
Some companies have been known to take the money that you send to be placed in your prepaid account and send you an invalid card that will not work. Many times you will not be able to contact the company in order to get a refund or even file a complaint about the bad card.
Some companies will deduct money based on purchases you never made, without confirming the legitimacy of the transaction. In these cases, it becomes difficult for the consumer to prove they did not make the purchases.
Improper Deduction of Funds
Some prepaid credit card companies have been known to improperly deduct funds from a bank account you have set up to fund your prepaid account. When this situation occurs, the consumer may have to do a lot of legal legwork to clear up the situation. In some cases, it has been reported that customers might not even receive a full refund when funds are improperly deducted, if they receive a refund at all, and sadly some of the refund checks that were received did not clear the bank.
Before investing your hard-earned money into a prepaid credit card scenario, check out the references and reviews of other customers by doing an on-line search. The last thing you want to do is waste money by getting ripped off. Chances are good that consumers will take to the Internet to voice their opinions and experiences loud and clear.