10 Things You Never Knew About Prepaid Credit Cards

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Are you looking for an easy and low cost way to keep control of your finances?

If so, a prepaid credit card could be the answer.  Prepaid cards have been growing in popularity over recent years and they allow you to keep close control over your cash by only ever letting you spend money that you have pre-loaded onto your card.

They can be used at ATMs to withdraw cash and for purchases online or on the High Street.  If you’re considering a prepaid credit card, here are ten things you should know about this type of plastic.

#1 You can’t go overdrawn

Prepaid cards have no overdraft facility.  You can only spend the money you have loaded onto your card and so there is no chance of you going overdrawn.

#2 You can use a prepaid card abroad

Many prepaid cards are accepted overseas which makes them perfect for your holiday spending.  You can load your card up with cash before you leave and then use it whilst abroad to withdraw currency at an ATM or to pay for goods and services.

#3 You don’t pay interest

As you are only ever spending your own money, you never borrow from the card provider.  This means that there is never any interest to pay.

#4 It is easy to manage your card online

Most prepaid credit cards let you manage your account online.  This makes it easy to check your balance, monitor your spending and to top up your card.

#5 You can withdraw cash at an ATM

You can use your prepaid credit card to withdraw cash at most ATMs.  You can normally withdraw the money in your account or a maximum daily limit.

#6 You can credit your salary to your account

Many prepaid cards allow your employer to credit your wages directly to your prepaid card.  You can also top up your card online, at a bank or PayPoint or from another bank account.

#7 It is an easy way to do an international money transfer

Many prepaid credit cards allow you to add an additional card to your pre-paid account which can be sent to a family member or friend who lives overseas. You can top up your card with cash in the UK, and funds can be withdrawn instantly abroad in the local currency.

#8 You don’t need to go through a credit check

A prepaid card is not a credit facility and so you do not need to pass a credit check.  Even if you have a less than perfect credit history you can normally take out a prepaid credit card.

#9 You can use your card to shop online

Saving money by buying goods and services online is easy with a prepaid credit card.  You can use it on the web in the same way that you would use a traditional debit or credit card.

#10 You can use it to register for online services

You can use a prepaid card to register for services such as eBay or PayPal. If you are buying or selling goods online, or you need to transfer money, you can use your prepaid credit card to benefit from services such as PayPal.

Filed Under: Credit Card

Patrick Naylor is a freelance writer, journalist and editor. He often writes articles covering personal finance subjects including debt management and Individual Voluntary Arrangements (IVA).
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