Credit Cards
Prepaid credit cards and their benefits
What is a prepaid debit card? It is somewhat similar to the usual credit card, the difference being that it has a lower credit limit compared to the usual credit card, and this credit limit depends on the security amount which the account holder deposits to use this card. The prepaid credit card is also termed as secured credit card.
The benefit of these prepaid credit cards over the usual ones is that the user will never go into debt as the card has limits to the purchasing power. No late fees or interest charges are chargeable because of the security deposit; the same way it is for debit cards. One can make reservations for hotel rooms and give their car rental fee and shun the opportunity of interest charges.
More Credit Cards for Businesses as Loans Dry Up
As small business lending is drying up, a lot of banks are offering more credit cards for businesses.
CNN reports that banks are offering more credit cards for businesses in lieu of traditional small business loans. In fact, JPMorgan and Chase has introduced four new credit cards for businesses. All of them have interest rate that are up to 30%.
More credit cards are being offered because they are more profitable for banks — allowing them to charge (and hike) variable interest rates and charge penalties such as late fees.
The plastic financing mentality is catching on. CNN reports that 60% of small business owners have used a credit card in order to finance their small businesses. On the opposite end of the spectrum, only 45% of the same small business owners had a small business bank loan.
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