What Are the Pros and Cons of an Anonymous Prepaid Credit Card?

Among the pros of using an anonymous prepaid credit card are the ease with which a person can obtain one and the privacy an individual may enjoy when using one to make purchases. The cons can include the fact that a prepaid card user must have his own funds to apply to the card and pay fees to spend his own money. Additionally, a person who has a prepaid card may find it harder to make certain purchases with it, such as renting a car or making a hotel reservation.

One of the main pros of obtaining this kind of prepaid credit card is the fact that a person usually does not have to gain approval for it. When an individual wants a traditional credit card, he has to apply for it and hope for approval. The application process involves providing a lot of sensitive information, such as the applicant's tax identification (ID) number, birth date, place of employment, and home address. In the event that an individual has poor credit or is unemployed, he may find it very difficult to secure a traditional credit card. With an anonymous prepaid card, however, there is usually no application process and no checks into credit or employment histories.

An individual may also consider the lack of purchase tracking a benefit when using an anonymous prepaid credit card. When a person uses a traditional credit card, his purchases are often tracked and then used to analyze his buying habits. With this card, however, the user doesn't provide any identifying information about himself, so it is impossible for anyone to track his purchases in this manner.

Unfortunately, there are also cons to using anonymous prepaid credit cards. One of them is the fact that the user must actually have money to deposit into the card. With a traditional credit card, a financial institution lends the credit card holder money in the form of the initial available balance on the card. This means a person with a traditional card is initially spending someone else's money rather than using his own money from the outset.

Another con of using an anonymous prepaid credit card involves fees. Since the cardholder is using his own money, he might imagine that he won’t have to pay the fees that are usually required for having a credit card. In many cases, however, these cards do subtract fees from the user's balance on a periodic basis, and some charge fees when people add money to the card. The fees are usually low, but many people feel they should not have to pay to use their own money.

In general, a person can use an anonymous prepaid credit card in the same way as he would use a traditional card. Some types of purchases, however, may prove hard or virtually impossible to make with a prepaid option. For instance, most rental car businesses will not allow an individual to rent a car with a prepaid card, and some hotels will not accept reservations made with them.