The prepaid credit card is a simple card to understand. The easiest way to look at it is, to ses it as a gift card that is available from many stores throughout the UK. This is because a prepaid card is already loaded up with the holder’s own money. These cards can be used anywhere, as long as the retailer happens to accept them.
The large majority of these cards are just like credit cards in that they do have protection on them. This means they have the holder’s name written on the card and many do have CHIP & PIN facilities so even if the card is stolen they can’t be used without the authorisation of the card owner.
Getting a Prepaid Card
Due to the fact that these cards are loaded with the holder’s own money it means that anyone can get one of these cards. This differs from conventional credit cards as credit checks are not required for prepaid cards. Some basic identification checks are required before obtaining prepaid cards and the big plus is that applicants don’t have to be 18.
Convenience of Cards
The main benefit of getting a prepaid card is the convenience. To start with, the convenience comes into play when it comes to debt. With these cards, it’s impossible to get into debt since the money that’s on the card all belongs to the holder. This means that there are no interest charges, no credit payments, and there’s never a possibility of incurring any fees associated with any missed payments or fees associated with spending any money.
These prepaid cards are also more convenient than conventional gift cards whilst also having the flexibility of credit cards. This is because holders of prepaid cards are able to use them both on the Internet and in various places abroad. Most stores that accept cards accept prepaid cards.
Planning with a credit card is difficult due to the fact that interest rates and potential late payments have to be taken into account. With prepaid cards, planning for the future gets much easier. All that happens with these cards is that the card is loaded with money directly from the cardholders own funds, the money is spent, and the limits to what can be spent end at the amount of money on the card. No fees, no payments, and no limits.
Freedom of Movement
Money can also be transferred to other prepaid cards. This can be done by simply adding another card to an account in the UK. This means that money can be transferred to each separate card. It can be a perfect way to give children some financial responsibility. Furthermore, any fees that are incurred with transferring money between accounts, are normally much lower with these cards.