*I've also posted this in the Consumer Proposals section*

Hi, All,

While in consumer proposal or bankruptcy, many of us still need to use a VISA or MasterCard. "Secured" credit cards are often mentioned on this forum. These are cards that one secures with a deposit to the card issuer. They are normal in every other way, are considered "credit", and appear on your credit report.

A second alternative is the "pre-paid" card. With this card, you actually pre-pay money into the card itself just like making a normal "payment", except that you can never go below zero - hence, it's not really "credit", but more like a debit account. It does not appear on your credit report, and no credit checks are done. However, a prepaid card is still a "real" VISA or MasterCard, and will work the same way when making purchases.

I myself use a Bank of Montreal (BMO) Prepaid MasterCard, and it works well in every way - travel bookings, online, everything. There are other prepaid cards out there too, but this is the one I've used.

Just Google "BMO Prepaid MasterCard" and you'll get the link. It is accepted by all merchants, doesn't look weird in any way, and is a real honest-to-goodness MasterCard.

You can apply for it on-line. It takes about two weeks to get. They withdraw the $10 fee once you've activated the card and loaded some money into it. You can check your balance online or on the phone. You can print out a monthly statement online as well. The card even gives you Air Miles. I have a Bank of Montreal chequing account, and I can make "payments" into this card via my online or telephone banking, just like any other card. Or, you can just go into a BMO branch and make a payment at the counter. There is no minimum you have to keep in the card, I don't think. Mine often only has $5 left in it, until I load it up again.

I am a merchant myself, and I can assure you there is nothing unusual about these cards from the merchant standpoint. You can use them anywhere you normally use a MasterCard.

The Financial Consumer Agency of Canada recently published a guide to Canadian Pre-Paid cards, which is available online as a PDF. The guide contains lots of info and useful comparisons of the cards available (the Bank of Montreal one appears to be far better than the rest). You can find this guide by Googling "FCAC Canada Pre-paid Mastercard Visa comparison".

Best wishes,
~Wendy

Hi Ellabou,

Thanks for the info. Sorry to hear the hotels wouldn't accept your prepaid cards. As a merchant, I accept them - in fact, I wouldn't know how *not* to accept them - when I put a payment through to my bank, either the transaction is "approved", or it is "declined".

Do you know if the hotels actually tried to put your payment through? Did you tell them you were using a prepaid card (if they didn't know how these worked they might say "no")?  Just curious.

Best wishes,
~Wendy

Hi Ellabou,

Thanks for the info. Yepp, it's true that the first four digits of a VISA or Mastercard identify what bank and what country it's from, and possibly what type of card it is. My Bank of Montreal Prepaid Mastercard has a prefix of 5280, which is different from my previous standard BMO Mastercard. However, the nice thing about this particular card is that it doesn't look funny or say "prepaid", it has one's name on it, and the numbers are embossed. Obviously it must have been that four-digit prefix that was noticed by the hotel employees.

As a merchant, however, I have never received any bulletins or warnings about certain prefixes to look out for, or anything of that nature. I even tried my banking site's "merchant services" section to see if they have any directives about it - but nothing. Maybe it's something peculiar to hotels.

As a customer, I've never had my BMO prepaid Mastercard turned down at a hotel. I even use it to pay Bell telephone, which is an automated monthly withdrawal.

However, obviously it does happen - so thanks for the warning!

Best wishes,
~Wendy

Hi Cala,

I was curious, so I looked up and read the Cardholder Agreement for the BOM Prepaid Mastercard.

You're right - under the section "About Your Personal Information" it mentions a list of sources from which they "may" gather information for your application, and the list includes credit bureau.  However, I believe in the case of a prepaid card they don't check this source (it costs them money to do so) because they are not granting you credit. With their low one-time fee of $9.95 for the card, which may be the only money they ever make from it, I don't believe they're going to spend any money or time verifying anything but your name and address. No reason for them to do so.

I got one of these cards while in a consumer proposal, so I think you can feel confident about applying.

Best wishes,
~Wendy

I am currently in my 1st month of bankruptcy and looking at getting the BMO Prepaid card.
1. I had a BMO MC which was included in my bankruptcy, will I be denied the prepaid card?
2. Do I have to let my trustee know I have a prepaid card?
3. I have a TD bank account, how long does it take for the money to transfer to the prepaid card?

Any help is appreciated.

Thanks

Thanks for your reply.

1. I would never apply for a real credit card as I don't want one until I am on a straight path.

2. Do you know of any prepaid VISA cards that work in the same way as the BMO? I am now leary to sign up for the BMO beacause of what you say about them taking my money from the prepaid card.

Thanks

Hi,
Sorry for the delay in returning an answer. Was in the hospital for a week. Real life carries on...even during bankruptcy.
Chubbs filled in admirably. The only thing that I wonder about with the cards that can be purchased at places like Stapes, etc., I wonder  if hey have your name, date of expiration and the 3 digit number on the back of the card that some places want. The BMO prepaid and (the Capitol One I believe) look exactly like a real card. It's true though that the prepaid cards are identified by their number and places like hotels and car rental agencies who require a damage deposit won't usually let you use a prepaid for that reason...unless you have big money on it to cover what they want.
As for applying for a BMO prepaid.....it's just something that I would be leery of in your circumstances. I may be right out to lunch on that.

I picked the BMO because I was able to afford it.

In the end the Capitol One seems like the best idea because you can start rebuilding your credit almost immediately it seems.

Good Luck!!

The post does not allow me to add a link so just go to google and type in(capital one prepaid card canada)  without the brackets and scroll down to "Capital One Prepaid MasterCard - Overview"

I guess we're not allowed to attach links.