Prepaid Cards Explained.
Getting through modern life without a credit card is a struggle – which is why prepaid cards are fast becoming the new flexible friend. Prepaid cards look identical in appearance to credit cards and can be used for all the same things, like shopping online, booking flights or going on holiday. With the help of leading financial website www.debts.org, we explain what prepaid cards are, what they do and why they are safer than credit cards.
What are prepaid cards?
Prepaid cards work in the same way as top up mobile phones. Your spending power is directly limited to how much you load onto the card. Prepaid cards share all the common features of a credit card, including: company branding, signature, card number and Mastercard/Visa logo.
What can I use a prepaid card for?
You can use a prepaid card in the same way you would use a credit card. Prepaid cards can be used to: shop online, make hotel reservations, hire a car, book flights and more. You can make purchases with your prepaid card wherever you see the Mastercard/Visa logo.
You can also use your prepaid card to withdraw money from most cash machines – assuming you have adequate funds.
Are there any downsides to prepaid cards?
If you are trying to repair a poor credit history a prepaid card will not be able to help. Using credit is the best way to improve your credit score – Prepaid cards use your own money and not borrowed funds. For tips on how to repair your credit score you should visit www.debts.org/credit_reports
Prepaid cards have start up charges of around £10 and additional charges of about £5 per month. You can shop around for the cheapest prepaid card at www.debts.org/cards/prepaid_cards
What are the benefits of a prepaid card?
Firstly, no credit checks! Prepaid cards do not use credit of any kind because the money you spend is your own. People who have been refused credit cards due to debt problems have a hassle free alternative in a prepaid card.
Prepaid cards enable the spender to keep a tighter control on their finances. Out of control spending on credit cards is much to blame for the crippling debt problems affecting many of Britain’s consumers today. A prepaid card cannot be over used. If you put £100 on your card, you are limited to £100.
For more information on prepaid card benefits, visit www.debts.org/cards/prepaid_cards
Are prepaid cards safe?
Prepaid cards are safer than credit cards because you determine the limit and not the bank. In the unfortunate event that your card is used fraudulently, the criminals can only spend what you have stored on the card. It therefore makes sense to store only what you need for any given purchase – especially if you shop online regularly. Fraudsters often abuse credit cards to their limit, which can run to thousands of pounds.
Can anyone have a prepaid card?
Prepaid cards are available to people of any age, whether employed or unemployed, wealthy or up to their eyeballs in debt.
Many parents give their children prepaid cards to teach them budgeting skills and transfer funds on a monthly or fortnightly basis. Prepaid cards also offer young people valuable experience in handling plastic before they get their own credit cards later in life.
Get your prepaid card by visiting www.debts.org/cards/prepaid_cards
