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Added October 20, 2010 from: Mike Killian
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 Mike Killian
Answered By Mike Killian:
Prepaid credit cards typically come with an initial account set-up fee. The amount varies, but typically the fee ranges from about $5 to $10, and even higher. There are usually monthly fees, as well, or traditionally a transaction fee each time money is posted to the account. Sometimes there are also use fees. You should be aware also that a prepaid credit card is not always accepted, especially when purchases are made online.

An alternative you might consider would be a secured credit card which you can obtain from your local branch of most any major bank. This type of credit card is issued in conjunction with a savings account, with the maximum credit limit secured by the savings balance. This card has three benefits: First of all, it is a credit card like any other except for the limit. Second, a youth can learn the habit of credit responsibility by making timely payments each month. But most important, a secured credit card is reported monthly to one or all three credit bureaus, which makes it the fastest way to establish good credit if on-time payments are made faithfully.

Over a third of a person's credit score is based upon on-time payment history. Making payments on any reported debt, including a secured credit card, nourishes that effort. But be aware that any late payment seriously negates those efforts.

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