What are Pre Paid cards?
Pre paid credit cards are kind of like debit cards, but they can be used anywhere that accepts that brand of ‘credit card’. I say they are like a debit card, as there is no ‘credit’ as such.
Basically, you, the cardholder, just pay in whatever funds you would like to have on the card, and spend it as and when you want to.
- Why Use Pre paid Credit Cards? Less to worry about when you are abroad. – If your card gets stolen, the thief can only take out what is there, and not run you into debt.
- Pre paid credit cards are often available in currencies other than your home currency… Great for when you are abroad.
- You can avoid getting into bad debt, as you can not usually go overdrawn with most of these cards (But be sure to check with the provider)
- No credit check when applying means that you can get as many of these cards as you want, and not have to worry about excess credit checks screwing with your credit rating!
- Pre paid credit cards are a good idea for internet payments, as if any ‘hacker’ or ‘cracker’ gets hold of your details, they will not be able to run you in to a large amount of debt. (Again, check the details with each specific card provider, and also your terms and conditions)
- Another benefit of not having to undergo a credit check is that anyone (over 18 usually) with good ID can get a card, no matter how low their credit score is.
So you see, despite being a little more costly than some credit cards, and putting aside the fact that you may not get benefits that you would expect from a ‘real’ credit card (such as air miles, reward points etc) – Pre Paid Credit Cards can be very useful.
Like any credit or monetary decision, do your research before taking out a pre paid credit card.