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What Good Is A Stored Value MasterCard or Visa?
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You’ve seen them at the counter at your local
CVS or Target store – stored value plastic
cards that bear a MasterCard or Visa logo. They
work just like gift cards – you ‘charge’
the card by paying a certain amount to the issuing
company, and then you can use it to make purchases
until your money runs out. In essence, they’re
glorified rechargeable gift or debit cards –
so why should you pay up to 20% of your money for
the privilege of putting it on a stored value card?
Actually, there are several situations where a
stored value credit card does make sense.
- Use a stored value credit card to pay for
things online.
Using a stored value card for online purchases keeps
your real credit info safe from hackers. Since the
only money available on the card is what you actually
fund on it with your own money, you can limit your
losses as well.
They’re also useful to those that can’t
qualify for credit or don’t want to use it,
but would like to make purchases online. They’re
accepted for most purchases that don’t involve
a repeating or recurring charge, so they allow someone
without a credit card to make purchases that can only
be made with a general use credit card online.
- Use a stored value credit card for the convenience
of credit cards.
Most point of sale purchases can be made with a stored
value card. If part of the reason that you use credit
cards is to avoid carrying cash, or to have a record
of your purchases, you can get the same convenience
with a stored value card and avoid the temptation
of overspending.
- Use a stored value card for putting your
kids on a budget.
One of the best uses for a stored value card is to
provide a monthly allowance to high school and college
age kids. Since all that’s available to them
is what you fund on the card, there’s no risk
of them running up bills that you – or they
– can’t pay. It’s easier than a
check, and safer than cash.
- Some stored value cards offer rewards and/or
credit history help.
It’s rare, but there are some stored value cards
that will report your payment history to credit bureaus.
While payments made with a stored value card aren’t
technically ‘credit’ they can establish
a pattern of spending and payments that can be helpful
if you can’t establish credit in any way.
However – if you have $200 or so that you
can put on a stored value credit card, you’re
much better off putting that on a secured credit
card and paying your full balance every month. See
our articles on secured credit cards for more details.
In general, stored use ‘credit’ cards
are a good way to go if your plan is to use it for
a fixed monthly amount, or to fund purchases that
you’d prefer not to put on your standard credit
cards. Besides the situations listed above, they
also offer the benefit of not counting toward your
available credit, since they’re NOT credit.
They’re only another way of spending the money
that you already have.
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| What
Good Is A Stored Value MasterCard or Visa? |
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