Prepaid cards: how much you know about them?
Aside from using them in your daily shopping, how much do you know about prepaid cards? Learn the pros and cons of this widely used financial product and take advantage of all its benefits.
The latest campaign called ‘Pay YOUR Way’ revealed Britain's payments knowledge gaps and suggests that Brits aren't as payment savvy as they should be.
In fact, the majority of Brits know very little about what common payment terms mean and many lack confidence in how to make common transactions. Older generations have the strongest knowledge when it comes to payment terms and uses.
Prepaid cards are probably the most essential bank product. Do much do you know about them?
A prepaid credit card is a payment card -usually MasterCard, Maestro, Visa Electron or Amex- that is pre-loaded with your own money.
One of its major benefits is that you cannot spend more that what you have, which will help your budget and financial planning; and will also prevent you from falling into debt.
On top of this, there is no need to pass a credit check to owe a prepaid card; you don’t even need to be 18 to apply for one.
Differing from credit cards, prepaid cards users do not need to pass a credit check. Because of this, you can pay for goods and services -even on the internet and internationally- as long as there is money in it.
Also unlike credit cards, with prepaid cards there are no interest charges, late payments or over limit fees. This helps you to prevent spending in extra costs.
Embarrassing prepaid cards
Its positive side, however, also brings its negative one. Because you only can spend what you have, consequently, if you don’t have any money, you won’t be able to purchase or pay for any product.
Therefore, you might experience an embarrassing situation when your card is returned back to you due to a “no funds” message.