Prepaid cards do not get you into debt
Benefits on getting a Prepaid Cards Cash Account
1 Prepaid Card Convenience
Prepaid cards do not get you into debt, as only transactions up to the balance loaded onto the prepaid account will be authorised. Therefore, you can only spend what you have paid in! Most prepaid card providers enable you to manage your account online or via an interactive Voice Response telephone service. So, you are always within easy reach of your balance.
As it’s your own money, and not credit, there are no interest charges, late payment or over limit fees. In actual fact, you don’t even need to be 18 to apply for one!
You are in complete control of your funds, and do not need to carry around large sums of cash! In most cases, if your card gets lost or stolen, your remaining balance will be transferred across to a new account, and you will receive a replacement card.
2 The internet – great discounts
Prepaid cards are widely accepted across the internet. They are issued under a MasterCard, Visa Electron, Maestro or Amex badge, and therefore have the same acceptance as credit and debit cards.
So, rather than paying cash in the high street, you can get some great deals online, and save £££’s. Goods and services are usually much cheaper online, so you can grab some bargains using your chosen pre-paid card.
You can also use a prepaid card to register for services such as Ebay or Paypal. You can then grab even better deals, and pay via Paypal immediately. This replaces the need to send cash, cheques or postal orders, which can add another 7-10 days before you receive your goods.
One prepaid card issuer even provides you with purchase protection, so you get to enjoy the same benefits as a credit card holder! See our section on prepaid consumer rights.
3 Financial planning
You are in complete control of the funds that you load onto the card. You can even get authorised users added to your account with most of the UK prepaid banks, and they each get their own card in their own name. You can only spend what you have paid in, and you can look at your transaction history 24 hours a day via the internet or telephone, with most of the banks.
Some of the card issuers enable to you set-up pay as you go prepaid accounts. You are not going to earn interest on your money, but it provides a great way of storing up some emergency funds, or just left over cash for a rainy day!
4 Money Transfer
The use of Pre-paid credit cards can be a much cheaper way of doing international money transfers. As you have seen, its very simple to add an additional card to your pre-paid account, which may be sent to a family member or friend who lives overseas. The card can then be re-loaded with cash in the UK, and then funds can be withdrawn instantly abroad, in the local currency. It’s likely to be quicker and cheaper than most money transfer services! For more information, take a look at our prepaid card money transfer section