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I’ve been thinking about the idea of prepaid credit cards for a little while now and I’m not entirely sure why they exist or why people use them. Prepaid credit cards often have a ludicrous number of fees such as an application or account opening fee, a monthly maintenance fee, reload fees, etc. and I only see one benefit to prepaid credit cards – the fact that you don’t have to carry the cash with you.

In looking at a bunch of fees, the lower application fee I found was around $10 and the lowest monthly maintenance fee was around $5 – that’s $10 down and $60 a year just so you don’t have to carry cash around. When you consider the cash flow concerns of the individuals using these types of cards, $60 is a lot just for the the luxury of not carrying cash. Heck, I don’t have cash flow concerns and I refuse pay an annual fee on any credit card ever.

(I’m making an assumption that a prepaid credit card doesn’t help your credit)

Is the allure of credit cards so strong that people are willing to pay just to have a piece of plastic? Or is there a benefit I’m not seeing?