Paying with plastic is very commonplace these days, and perhaps its omnipresence has made us too familiar, making it easy for us to take credit for granted and for us to get in trouble. We think that we have more money than we actually do, interest builds up, we only make minimum payments, we miss a repayment, we have multiple cards, and our credit rating goes down.
Prepaid cards are a way to keep tighter control of your credit card spending. You still have the ease of use and quick access to cash that your credit card affords you, instead of putting you into debt, a prepaid card simply allows you access to money you actually have. There are plenty of options for prepaid cards available, boasting different purchase fees, foreign exchange costs, ATM fees, overseas ATM fees, minimum loads, and annual renewal fees. The biggest differences are in the purchase fees, which currently range from £5 to £10, and the annual renewal fees, which range from £0 to £9.95 (at the time this article was written).
Some of the benefits of prepaid cards are that they are available to anyone, regardless of credit history. No credit check is necessary, because no one is lending you money. You, with a form of cash, charge your prepaid cards. You also have more control because you know that you will not go beyond your means. And you will still get a spending breakdown, allowing you to review your purchases in detail. Some cards will issue additional copies, making family use easier: You could send prepaid cards to family living abroad, giving them the security of access to money. And it is quite simple to top-up, either on-line or, like Sterling?s Prepaid Mastercard, at any Post Office branch.
The only disadvantage of prepaid cards seems to be in the fees, which could add up quickly. Do your research to find out which cards charge which fees, and what services (security, customer service helpine, etc.) are offered in exchange for these fees.