Prepaid credit cards – how they work
Prepaid cards are not a new idea – we’ve probably all bought gift vouchers or used mobile phone top up cards – but they are a new slant on the concept. The cards look like every other debit or credit card but the real difference is that you can only spend what’s already loaded onto the card.
Obviously the biggest advantage of this is that you aren’t ever going to run up a great big credit card debt because your card would be refused at the point of sale if you don’t have any money on it. The other primary advantage is that it saves you having to carry cash which could get lost or stolen.
You simply load your card with however much you want to have on it. This can be done at the Post Office, by bank transfer, online or using PayZone or PayPoint machines. When you use it to pay for goods, you do it in just the same way as you would any other card – with chip and pin. The same goes for online shopping. At the checkout, do just as you would with any other card. As long as there’s enough money on the card, your transaction will go through.
To find out which prepaid card would suit you, visit a comparison site such as moneysupermarket.