Prepaid Credit Cards
Prepaid cards avoid debt problems occurring
Money Advice Direct speaks to thousands of consumers each year who are in debt because they only make the minimum repayments on their credit cards each month. For this reason there a many benefits of using a prepaid debit or credit card because there is no debt risk or chance to overspend because the consumer is limited to the amount of money put on the card.
What is a prepaid credit card?
A prepaid card looks like a credit or debit card. It can be used in the same way as a credit card in shops, restaurants or online, around the world. The main difference is that there is no risk of getting into debt because you can only spend the amount of money that is pre-loaded on the card.
Prepaid credit cards are suitable if you are rejected for a credit card
Many people are rejected by credit card companies because they have poor credit. The problem with today’s society is that a credit card is needed to book hotels, airline flights or shopping online. This means that people with bad credit can't do any of these things because they don’t qualify for a credit card. It is for this reason prepaid cards are becoming very popular.
Prepaid cards are an excellent tool for budgeting
A budget is a plan that shows what money you plan on spending. Prepaid credit cards are an ideal way to budget for yourself or help to manage your children's spending. Like a credit card you get a full breakdown of spending on the card so you can see what has been purchased, who from and when.
Advantages of prepaid credit cards
- If a person is unable to get credit then a prepaid credit card is a suitable solution.
- If a person is too young to qualify for a credit card then a prepaid card is an excellent idea.
- Prepaid cards are more convenient than cash.
- Businesses can reduce the need for a cash float or petty cash box if they have a few prepaid card available for staff to use.
- Prepaid cards are good migrant workers who do not have a bank account.
- Prepaid cards are useful for travel purposes as reduce the need for cash or travelers cheques.
- Prepaid cards can be used at regular Visa and Mastercard payment terminals.
- Prepaid cards can be used to withdraw cash at ATM or cash point machines.
- Prepaid cards are popular with parents who give them to their children
Disadvantages of prepaid credit cards
Unfortunately there are some costs associated with prepaid credit cards such as application fees, monthly service charges, premium rate customer helpline charges, admin charges to load money onto the card and charges made every time the card is used or cash is withdrawn.
How do you choose which prepaid card is best for you.
We have provided a unique price comparison tool, which gives you the chance to compare prepaid cards, their fees (including withdrawal fees and monthly fees) and their additional benefits such as their reload options and whether you can manage your account online.
Click here to compare all prepaid cards
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IVA's
The IVA Guide
Money Advice Direct has put together an IVA Guide based on the enquiries and questions that we receive at our helpline offices.
In the guide we cover such subjects as IVA Approval, early settlment of your IVA, missed IVA payments, IVA failure, additional debt claims and much more.
[click here for IVA Guide]
What is an IVA?
The IVA is an extremely powerful tool enabling you to clear your debt and return to a clean financial bill of health. Visit Money Advice Direct's Guide to Individual Voluntary Arrangements (IVAs).
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DANGER
Due to the tremendous demand for debt consolidation services the United Kingdom is now overloaded with debt management companies that contain misleading information. [more...]