These days more and more people in the UK are moving away from carrying physical cash in favour of credit cards. Prepaid credit cards have become quite popular in the last decade or so for a number of reasons. If you want an easier and more convenient way to pay for your online and offline purchases, you will need to learn more about this option.
How Prepaid Credit Cards Work
You will find that prepaid credit cards provide you with all the convenience of a credit or debit card, except the funds are already loaded on. This means that you can only spend as much as you have on the card at any given time. If you try to make a purchase with one of these cards that exceed the amount that is on it, the transaction will not go through. The criteria that you have to meet to get one of these cards are far less than with most credit cards.
Getting a Prepaid Credit Card
If you are interested in getting a prepaid credit card, you will need to know the process you will have to go through to get one and how to use it.
• Fill out an application: The first step in acquiring a prepaid credit card is filling out an application. These applications are usually fairly short and don’t take a lot of time to complete. Just make sure that you only submit completely accurate information, because otherwise you could get denied.
• Activating the card: Next you will have to actually activate the card. Once you receive the card itself, you can set the PIN that you want associated with it. Usually this is a four-digit number. You can do this online or over the phone. Some prepaid credit cards can be activated at an ATM.
• Loading Funds: There are a number of different ways to load funds on a prepaid credit card. You have the option of transferring money from your bank account to the card, which usually takes 2-3 business days. You can also transfer money onto the card via SMS text or by going to a local post office using cash. Any of these methods for loading money are pretty simple and straightforward.
• Spending the money: Once you have loaded the funds onto the card, you can start using it. You will use the card just like a normal debit card. You will be required to enter your PIN when making a purchase. You can also get money from the card at an ATM, though you may incur fees.
Cost of Prepaid Credit Cards
There are a number of costs associated with prepaid credit cards that you should know about. You might have to pay a fee just to get your initial application for the card processed. Not all issuers charge a fee, but some of them do.
There are also fees that you will have to pay when loading funds onto the card. This can vary anywhere from £1 to £3, depending on the card and loading method that is used.
You may be required to pay transaction fees when you use your card to make a purchase. A majority of issuers tend to waive this fee though. If you ever need to replace your card because it is lost or stolen, you will most likely have to pay a fee of some kind.
Some prepaid credit cards have inactivity fees that kick in when you haven’t used the card for a certain amount of time. It is important that you know what the issuer’s policy is about this.
Benefits of Prepaid Credit Cards
There are quite a few benefits to having a prepaid credit card, including the fact that they can be used just about anywhere. These cards are ideal for online purchases, as they act just like debit cards. All you’ll have to do is enter your card details when making a purchase on a secure website.
Prepaid credit cards are also widely available and easy for just about anyone UK resident to get. The process for obtaining one of these cards is very simple and not very time consuming.
Who Should get a Prepaid Credit Card?
Some people can benefit from prepaid credit cards more than others, including young people (under the age of 16). If you have recently come to the UK for work, you might find that one of these cards can help you quite a bit. Prepaid credit cards are ideal for anyone who is serious about security. These cards minimize security problems that are commonly associated with traditional credit cards. If you want to get a prepaid credit card, it is important that you learn about them before making a choice either way.