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There are millions of international prepaid calling cards being sold and used everyday. You may be wondering how it all began.

Although international prepaid calling cards have become a powerhouse technological system generating billions of dollars, you might be surprised to know that it was first developed three decades ago. The history of prepaid calling cards is as interesting and amusing as other modern invention stories that you may have heard before. The cards were originally made in Europe then reached America after a decade. Today, almost every nation in the world has a variety of international prepaid calling cards available.

The 70’s

In 1975 SIDA, a producer and distributor of vending machines in Italy began experimenting with the idea of making calling cards. The idea was to replace coins being used for payphones since medal coins were in shortage and theft and vandalism was rampant. The first batch of made prepaid calling cards were released into the market in 1976.

These were very slim cards from cardboards and got stuck on more than one occasion. They operated via a magnetic strip at the back of the card that can be scanned by new special phones upon insertion of the card. The idea of paying per minute was already incorporated in this pioneer batch.

In 1977, the popularity of the new prepaid calling cards rose after one year and nearby countries in Europe like Sweden, France, the United Kingdom and Austria also started using the system and manufacturing cards. The magnetic strip validation was the key trait of the cards. A year later, Nelson G. Bardini from Brazil used inductive technology to improve international prepaid calling cards. There are sequences of coils that identified how much is used up in the card.

The 80’s

The new cards using inductive technology was presented at the national inventors’ exhibition in 1982. Japan also began manufacturing prepaid calling cards which sold several thousands daily. The Nippon Telephone and Telegraph company was the first in Japan to adapt to the new system. In 1984, France developed the technology by using chip-based “smart cards”.

Three years later, World Telecom Group, Siemens and General Electric manufactured magstripe cards which contained information. This is the same technology used by credit cards today. In 1988, the first catalogue of telecards was released in England by Dr. Steve His*censored*s. In 1989, AT&T invested in the system as well producing several thousands of cards daily.

The 90’s

In 1990, the non-magstripe calling card was made by Regional Bell Operating Company in New York which involved dialing a toll-free access number. The caller would then input the Personal Identification Number or PIN. This new system started the rise of international prepaid calling cards since it was very versatile and allowed access to any phone in the world. By 1995, over six hundred million dollars in sales were made from international prepaid calling cards.

The 2000’s

Sales continued to soar well into the 21st century counting in the billions. The system replaced most collect call systems and coin payphones and continued to develop with other gadgets as well like cellular phones and the internet. With its continuous success, international prepaid calling cards are definitely here to stay.

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There are several differences between a credit card and a Prepaid Credit Card and in order to understand all of them one should be able to know what each of them means. A credit card is a card one can use to buy something even if they do not have money in the account. This means that they have a line of credit. This line of credit can be as small as a couple hundreds dollars or as big as several thousands dollars. A Prepaid Credit Card is backed up by an account where you have to deposit money before actually being able to use the card.

In order to get a credit card you have to fill in a credit card application. Then you can get approved or denied by the bank where you applied for the credit card. The time you need for a credit card application is shortened by the online forms, but getting approved does not mean you can start using the money. In fact you do not even know how much your line of credit is. If approved you have t wait for the actual card to be sent to you and activate it before you can actually take advantage of your new credit card. The approval of a credit card application depends on how good your credit history or your credit score is. If this is the first credit card you every applied for it might take longer to get an answer, but it is still a shorter period of time than if you were using the regular mail. Even when you get approved for a credit with a relatively small credit line it is a good idea to try and spend only half or less of the amount credited in order to increase your credit score.

On a credit card once the credit limit is reached the card gets declined and cannot be used until payments are made toward the credited amount. On a prepaid card the card gets cancelled once there is no money left on it or the amount needed is bigger than the amount left on card. The prepaid one is also a better beginner’s credit card especially for teenagers and people who want to better manage their finances. If you have a prepaid card you will think twice before buying something, but chances are that you will actually buy the thing if you have a credit card even if you do not need the thing itself. A lot of times people apply for a credit card to help them get out of debts, but without realizing that most probably they will get into bigger debts than before getting the card.

When you apply for a credit card you need to fill in the credit card application with all sorts of information about your housing situation, employment situation, annual income and more. This does not happen with the Prepaid Credit Card since no one really cares where you get the money you put on the card from. With a prepaid card you decide how much money you want to put on the card, but with a credit card the credit limit can stay the same, can increase and even decrease depending on the activity of the card as well as how you make your payments.

In this high-tech era of computers and machines, the purchasing power of people is mostly based on credit. Nowadays, credit cards are almost indispensable in almost any business transaction. For one, nobody can purchase anything online without a credit card.

People who have a poor credit history though, will have a hard time getting or renewing their credit cards. This is where prepaid credit becomes useful.

There are lenders that offer prepaid MasterCards and/or prepaid Visa Cards. Both these cards can be used like a regular credit card. It is even hard to distinguish which card is prepaid or not, by simply looking at it or even using it.

This is basically how prepaid credit cards work. When an account is opened, the card should be “pre-loaded” with cash up-front. This is like paying for a pre-paid calling card.

Prepaid MasterCards or Visas can be used anywhere as long as these cards are accepted.

The prepaid credit card advantage:

1.      Prepaid credit card can be easily obtained. It can be purchased online or in local retail stores. It does not require any credit check or proof of income.

The only thing to do is to fill out an application, pay a small fee for setting-up the account and load the card with cash. The amount of cash loaded will be the “credit limit”

2. No interest charges.

When a prepaid MasterCard or prepaid Visa is used, there is no interest charge unlike the regular credit card. The reason for this is that the money used is the owner’s actual money therefore no interest is needed.

3. Prepaid credit cards are free from financial or credit problems.

4. Prepaid cards can be used almost anywhere. Prepaid MasterCards and Visa cards are almost accepted anywhere in the world.

Disadvantages of Prepaid Credit Cards:

1.      Usually a set-up fee of 5 to 50 dollars is needed when an account is opened. Then another fee of $5 or more is paid every time more money is loaded onto the card.

Regular credit cards usually do not charge a set-up fee or annual fees.

2.      Cash up front is needed before any purchase could be made with the prepaid card.

This could be an advantage since compulsive spending can be avoided.

3.      There are some prepaid credit cards that cannot be used to pay regular payments such as monthly electric consumption or online services.

The Conclusion:

The prepaid credit card is a definite help for people who have past credit problems. It is just a matter of choosing the right prepaid credit card that suits ones’ needs.