Question

5. (03.02 MC)

Martha wants a prepaid credit card to pay for her college expenses. What is true? (5 points)
She will get charged a lower interest with this type of unsecured card.
Lenders will not qualify her if she needs a secured card in the future.
Lenders will require collateral for her to qualify for this type of unsecured card.
She can replenish this secured card when it runs out of funds.

Answer 1

D. She can replenish this secured card when it runs out of funds

Answer 2

She can replenish this secured card when it runs out of funds.

Step-by-step explanation:

A prepaid card uses existing funds to pay for transactions. Usually, a prepaid card is pre-loaded with the amount a cardholder wishes to spend. Every transaction decreases the amount available for use. Once the amount is depleted, the cardholder replenishes it they wish to continue using it.

It is true that Martha can replenish her prepaid card. A prepaid card does not charge any interest or late payment fee because it does not use borrowed money. Lenders are not involved; Marta will be using her money pre-loaded in the card.