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News : Prepaid Credit Card UK
Pre Paid Credit Cards- Great Idea, or Financial Con?
Jun 17, 2008
Pre paid credit cards are, in a way, like a debit card, in that now actual credit is involved. They differ from debit cards however, because they are accepted pretty much anywhere that accepts the credit card brand
With pre paid cards like these, the card holder actually pays funds into the card (Loads the card) –and then spends the balance as they would a normal credit card.
What are the good points about pre paid credit cards ?
»» It is usually not possible to get into debt using a prepaid credit card. This is great for those concerned with getting themselves into bad debt.
»» Use abroad – These cards are often available in foreign currencies, making them handy for use abroad. Also, the risk of card fraud is a concern when abroad – at least with a prepaid card, people can only take what is actually on the card, and not run you into bad debt.
»» No need for a credit check to get a pre paid card.
»» Handy for online payments, as it saves you having to expose your real credit card details online!
»» There is no need for a credit check when applying for these cards, this helps keep the number of searches on your credit file down.
»» A way for people that have a very poor credit history to have a credit card, that can be accepted at most places that accept normal credit cards.
»» Instant decision on most cards… most pre paid cards are instant decision credit cards .
Any Disadvantages of Pre Paid Credit Cards?
»» With normal credit cards, you can get incentives, reward points etc… you usually don't with prepaid credit cards .
»» Often pre paid cards cannot be used to hire cars
»» Some suppliers charge a monthly fee for having a pre paid card
»» Often the cost of withdrawing on the card can be high
»» There will only be a limited number of places that you can re-charge the card
»» With some cards it may not be possible to re-load the card abroad
In summary, these cards can be useful, but make sure you know all of the expenses related to the card, and compare different pre paid cards, as they are not all the same!
Source: http://www.marketoracle.co.uk/
