Prepaid Credit Cards

A Prepaid Credit Card – also sometimes known as a prepaid debit card, is a new and clever idea that has been brought in because of people’s worry about the growing incidence of credit card fraud over the last decade or so, and also to allow people who don’t have a credit or debit card to buy things which require one.

Often people use credit and debit cards to buy things online, or when they’re on holiday, and prepaid credit cards reduce the risk of fraud becoming a problem for you by allowing you to preload cash onto the card, and then use it online or abroad for a small fee.

The idea of a prepaid card is that there’s no pre-agreed spending limit, instead, you acquire a card, and deposit an amount of money onto it. From here on, unless you choose to add more to the balance, the amount on the card only gets less, slowly reducing down to nothing. It means that if the card is lost or stolen, or someone tries to use it fraudulently, they will not be able to access any more money than has been placed on the card, and they will not have access to your bank details. By keeping the balance on your card reasonably low, you run the risk of losing much less money this way.

There are now a number of these prepaid cards available from various retailers. Some have an application fee, while some are free, and there is generally no monthly fee or charges to be paid. Cards can be topped up in various ways from a pre-agreed direct debit every month, to visiting a post office or bank, over the phone, on the internet or via an ATM. With some cards it’s also possible to have your employer pay part of your wages directly into the cards account.

Just like with a regular credit or debit card account, you can set some of these up so that they are in joint name meaning that you and your partner or child or whoever can both access and use the balance on the card. With a few cards there is a small charge when you top up the card, but the normal way that charges are made is that when you buy something using the card, a percentage (or a fixed amount dependant on the size of the transaction) is charged. These amounts vary from issuer to issuer, but the usual range is from 50p to 3% of the transaction amount.

Prepaid Cards on the Market

Splash Prepaid Card
Bread Prepaid Card
Optimum Prepaid Card
The Sun Prepaid Card
Caxton Prepaid Card
Escape Prepaid Card
FairFX  Prepaid Card
Kalixa Card
MyTravel Card

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