Reviewing the Best Prepaid Cards
A prepaid card is more like a credit card, the difference being that for a prepaid card, you have to load money onto it before usage. A prepaid card does not offer credit limits as is the case with credit cards, but one uses the money he/she had already topped up earlier. Prepaid cards are issued largely by Visa or MasterCard; the two globally recognized card service providers, meaning they are universally accepted and have a wide geographical reach. The cards can be pre-loaded through various means including online, via Sms or by contacting your bank. Prepaid cards are ideal in case you are planning to go on vacation or intending to place a cap on your spending. Most holiday goers, therefore, opt for this card since they can easily access their cash and make payments without the need to carry huge bills around. Applicants need not worry about their credit ratings since a good score is not a prerequisite to being issued one. However, it is advisable to choose the right card as some providers charge more. Some of the charges attached to prepaid cards include inactivity fees, withdrawal fees, application fees, transaction fees and top-up fees.
So what are the advantages and disadvantages of prepaid cards?
Prepaid cards allow one to spend only what they have. This keeps their finances in check.
Prepaid cards have become an accepted form of payment worldwide. This provides reliability and stress involved in carrying huge sums of cash.
Prepaid cards have absolutely no connection to a client’s bank account. They are also password protected. Incase of losing therefore, only what’s in the card is lost.
Fixed forex rate.
Since prepaid cards come in only three currencies, a fixed rate at the time of loading may be beneficial to the client in case the rates drop.
The many fees associated with prepaid cards can be a turn off for most consumers.
Cards not used for long time periods, say a year, will accrue charges. This may not augur well with consumers as these cards don’t earn any interest.
No section 75 protection.
Section 75 gives the consumer the right to make claims in case of a breach during purchase in the event that a credit card was used. Prepaid cards don’t have this provision.
With these in mind, it is important to look out for cards and currencies that will be cheaper hence saving you money. Money corp. explorer, Caxton fx currency and Vida fx prepaid currency cards are just some of the most preferred prepaid cards with no application fee, no withdrawal fee for using ATMs overseas and no top-up fee involved. Topping up when rates are favorable is always a smart move.
It is important to always keep an eye on your balance before using the card, as there isn’t any credit to be advanced in case you run out. Alternatively, one could opt for credit cards that charge cheaper fees for overseas spending.