Prepaid Debit Cards
- UK
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Today's Leading Prepaid Debit Cards. What is a
Prepaid Debit Card & How Do They Work?
A prepaid debit
card is a card that looks like a credit card and
is accepted everywhere a credit card is accepted,
but has one major difference: a line of credit is
not extended to the cardholder. In order to make
purchases with a prepaid debit card, money
needs to be placed on the card first. This money can
come from a variety of sources. You can place the
funds on the card yourself or a third party can add
money to the card.
A prepaid debit card makes
it easier to keep track of ones spending. In
addition, there is no risk of destroying a credit
history that has yet to be created because you
cannot spend more than what is placed on the prepaid
credit card. Many of these cards also report to
credit bureaus, which helps in building a positive
credit history.
Unfortunately, prepaid debit
cards generally have many more fees than credit
cards. In fact, there usually are no fees associated
with credit cards. Debit cards, on the other hand,
often have an application fee and an annual fee.
There are also fees added every time more money is
placed on the card. All of these fees can easily add
up to several hundred each year.
Also available are prepaid credit
cards. For further information on these
click here.
There are a
variety of prepaid debit cards, so comparing
different cards before choosing one is a good idea.
There are a number of companies offering prepaid
debit cards, remember to compare different cards to
find the right one for you.
The disadvantages of prepaid debit
cards include the fact that you don't have the
luxury of using a credit card bank's funds for 25
days for free (but you could also look at that as an
advantage, too). Another is if the card is lost or
stolen Visa and MasterCard have much stricter
notification requirements than with a credit card.
All in all the advantages of
prepaid debit cards usually outweigh the
disadvantages – especially for those individuals
that don't have access to standard credit cards due
to lack of credit history or because their credit
rating is less than perfect.
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