Prepaid Credit Cards

Prepaid debit cards are a good solution if:

1. You are struggling with bad credit.
If you are struggling to apply for a normal credit card, but need a Visa, Mastercard or Maestro for everyday occasions, a prepaid debit card is ideal. With no credit checks, everyone has guaranteed acceptance.

2. You want to give a gift of money to someone.
Unlike normal gift vouchers, these cards are not restricted to just one store and you can use a prepaid debit card (MasterCard or Maestro) in millions of places across the globe.

3. You are planning on traveling abroad.
If you do not want the hassle of traveller's cheques or carrying around a lot of cash, then they are a good solution. They can easily be stopped or blocked if lost or stolen and you will also be able to draw cash out from many ATMS around the world. Some cards even offer 0% on foreign exchange fees.

4. You want to help younger members of the family learn how to manage their own finances.
With more and more Britons facing debt troubles, this can be beneficial in teaching your children that you can easily live life without getting credit. Even under 18's can apply.

5. You want to separate and organise your finances.
You can easily keep track of your spending on things like shopping, luxuries, travel, bills or anything else that you can think of.

6. You are having problems opening a bank account.
Most bank accounts will come with a debit card, but if you are struggling with bad credit, you may find it difficult to get one. There are no credit checks required, so you have guaranteed acceptance.

Despite the obvious difference of being prepaid, you would use prepaid debit cards the same way you would use any other form of plastic money.

Buying something is simple - just do what you would normally do with one of your other cards!

* When you are at the shops simply hand your card to the cashier and use the Chip and Pin Machine to pay.

* If you are buying something over the phone, read out the card details as instructed and the sale is complete.

* If you are purchasing something through mail order, fill out the form and your card details and wait for your goods to arrive.

* When shopping on internet, just enter the card number details at checkout when instructed.

When using your card, the money is taken immediately from the card, not your bank account or any other means of finance. If you have money on your card, then you can spend it anyway you want.

You may need to provide proof of your identity and your address when applying - but that's all. Remember that there are no credit checks required and everyone is guaranteed for acceptance no matter what credit rating you may have.

Once you have been given or sent your card, you will need to activate it by following some simple instructions from your card provider. Once activated, you can then begin spending.

Paypoint
This is one of the most used and convenient ways to top-up a prepaid debit cards. Garages, newsagents, supermarkets, convenience stores and even off-licences accept Paypoint and can be used to reload your card.

Mmost funds should be ready in 1-2 working days once they have been paid to the post office. There is usually a limit to how much you can place on the card and this will also vary with different card issuers.

Payzone
There are 26,000 retailers in the UK that use payzone for prepaid debit cards. As before these can also be found in newsagents, convenience stores, garages and supermarkets.

One of the good things about this form of top-up is that a lot of these places are open 24/7, so they are very handy if you're stuck for some where to top-up in the early hours. The funds you pay onto your card are usually made available straight away. Again, you should check to see if your card issuer will charge you for topping up this way.

Online
Some card issuers will allow you to use a debit or credit card you currently have to transfer funds onto your prepaid card. This is obviously very handy as you wont even need to leave the house to top up your card.

Convenience

As mentioned previously, a prepaid debit card will not get you into debt because you can only spend as much as you have put onto the card. You limit yourself to the amount you choose and there is no going over that limit.

A good thing about is that via online or telephone services you can always easily access your balance and change your spending habits accordingly.

As it is your own cash and no credit is involved, there are no interest, overdraft, or late payment fees. You can even get a card for your teenage children.

Being in control of your finances is a must these days with people getting into so much debt. Having a prepaid debit card allows you to be in total control of your finances and removes the necessity to carry ing around large amounts of cash and the fear of extra charges.

A prepaid debit card is accepted online and throughout the world.

Just as credit and debit cards are accepted widely over the internet and across the globe - so are prepaid debit cards. Whenever you see a Mastercard, Maestro, Amex or Visa Electron sign, you can use your card there too.

Going online rather than spending your money on the high street, can mean you can pick up some great deals and save money. You can source many items for a better price on the internet and you can use your card to purchase them with ease.

Some card issuers provide you with purchase protection as well for complete peace of mind.

Financial planning

If you want to control the amount that you or your family spend a month, then you can put a certain amount onto the account and ask the issuer to authorise additional users, so they can each get a card in their own name. They will not be able to overspend as you can set a limit to how much they can spend.

Money Transfer

If you have family of friends abroad, you can use prepaid debit cards to help you conduct international money transfer. The process is easy. You can get an additional card for the person abroad, load up the card with cash from the UK and the funds can then used abroad in whatever currency it might be. This cuts out the cost and inconvenience of most money transfer services.

Security

If your card is stolen, the maximum that can be taken is what is preloaded on the card. This is obviously a lot than safer compared to credit cards.

If you notice that your prepaid debit card is lost or stolen, just like any other card it can be blocked.

In addition, if you find that your card has been fraudulently used, cards issuers will refund your money.

Lastly you should bear in mind that carrying a prepaid card is always safer than carrying cash.

There are a lot of choices for prepaid debit cards in the UK and most come in the form of a Mastercard or Visa card. Each card company will have different features and benefits which you should consider before applying:

What are the fees and charges?
Some cards will have an annual subscription fee and some with have higher top-up fees than others.

What are the top-up options available?
Find out if you can top up your card at post offices/paypoints etc. The more top-up options you have the better.

Other points to consider:

* Is it possible for you to manage the card online and actually see transactions you have made etc?

* Does the card offer a 24hr top-up service, especially for an emergency?

* What kind of protection do you get from the company?

Splash Plastic Maestro Card
Top Choice!
Card issue fee - £5.00
Reload fees - FREE except for top up via credit/debit card at 2.5%
Monthly fees - FREE
Maximum balance allowed - £3500

More Information

Card issue fee - £10.00
Reload fees - Standing order - £0.25, Paypoint - £1
Monthly fees - FREE
Maximum balance allowed - £3500

More Information

Card issue fee - £9.95
Reload fees - FREE
Monthly fees - £4.95
Maximum balance allowed - £5000

More Information

- Are there any charges for opening an account?

- Is there a monthly subscription fee and if there is what does services does it include?

- Are you charged and how much for call to the prepaid debit cards uk issuer's helpline?

- Does the card issuer charge for top ups and does this vary depending on the manner you decide to top up?

- If you chose to deposit money via the post office or bank transfer is there an additional bank fee?

- When you withdraw money with your card, is there a fee or when you are abroad what is the fee for foreign transactions?

- When your purchase items anywhere, over the Internet or from abroad are there fees?

- If you lose your card or it is stolen, do you have to pay a fee to have it replaced?

- Do you have to pay a renewal fee when your card expires?

- If you want to terminate your account is there a charge?

Does it make a big difference as to which card I choose?

Well, the simple answer is yes! Acceptance for the different types of cards vary on a large scale.

Maestro card acceptance is improving all the time, and the card is currently accepted at around 960,000 locations and internet sites in the UK, and 7 million locations around the world. Maestro cards can be used at the ATM machines, wherever you see the Maestro or Cirrus payment mark.

MasterCard is accepted around the world at merchant outlets and ATM machines, where you see the MasterCard (or Maestro/Cirrus) sign. You can use it at more than 24 million international locations.

* Card with the widest acceptance is is MasterCard at 24 million locations.

* Second place card is Maestro with acceptance at 7 million locations.

As you are loading your own money on the prepaid debit card, you are not being lent any money by the card issuer, so information relating to your transactions will not be exchanged with the credit bureaus (Experian or Equifax).

So no matter how you use you card, it will not make any difference whatsoever to your credit rating. This is one if the reason why you are given guaranteed acceptance with a prepaid debit cards.

One of the ways to improve your credit rating is to apply for a credit card from a company that specialises in dealing with people who have bad credit rating.

Alternatively you can apply for a prepaid debit card to help organise your finances, whilst fixing anything that might be on your credit report.

If you want to see your credit report, you may do so online directly with Equifax or Experian. You can even check your file instantly online.

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Prepaid cards have always been popular with teenage children in the USA, and with the trend now picking up in the UK it is important to ask whether these cards will benefit our children or actually work against them.

Some people believe that allowing youngsters access to these cards, will lead them into thinking that they have an unlimited supply of funds - especially if the parents do not use restraint when preloading the card with money. It is argued that this could result in children having a careless attitude to money later in life, and perhaps abusing credit cards in a similar fashion.

Others believe that because of the way prepaid cards are designed to work, they give children a greater awareness about budgeting and money management. It is argued that children will grow up with a greater appreciation of the value of money, because they will learn that either themselves or their parents will actually need to save money before they can spend any. This could encourage children to be less likely to depend on and abuse credit later on in life.

Whatever side of the argument you agree with, the responsibility lies greatly with the parents and how they encourage their children to use these cards. Like the saying goes, the apple doesn't fall far from the tree, and how you ultimately handle and perceive money can have a big influence on your child's spending habits.

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