Prepaid Credit Cards

Prepaid credit card otherwise called a secured credit card, is a payment card, pre-loaded with your own money that you can use wherever the payment card is accepted, like shops, restaurants, supermarkets, various service providers, etc., including on the internet and in foreign transactions.

Prepaid cards are issued under a MasterCard, Visa Electron, Maestro or Amex badge, and therefore have the same acceptance as common credit and debit cards worldwide.

Prepaid cards look like the traditional credit and debit cards and they offer the same ability to purchase products and services, but with a crucial difference. You can only spend the balance that has been pre-loaded onto the card. This means there is no risk of running into debt as it has no credit or overdraft facility.

On the left: Example of prepaid credit card issued by Cashplus.
It is a MasterCard ®.

By the way, Cashplus Prepaid  Money cards help you keep track of how much you spend. Every time you add, spend or withdraw money, you can get a mobile update right away showing how much money you've got left.

The way Prepaid Credit Card works

A prepaid credit card account is opened by depositing money into that account, much in the same way, you would make a deposit to open a checking or savings account. Once you have money in your account, you're issued a physical prepaid credit card that can be used anywhere in the same transactions in which regular credit cards are permitted.

The best part of the prepaid credit card is that you can charge to your heart's content and you won't be in debt. The money is yours and once it's gone, you can't spend any more until you make another deposit.
There are no bills and no interest charges. It's the same principle as using a debit card linked to a saving or checking account.

More about Prepaid Credit Cards

Please note that prepaid credit card are not a "real" credit card. There is not any kind of credit involved in usage of such card. However, you must deposit certain amount of money firstly, before you start using your prepaid credit card.

When comes to prepaid credit cards, you must know that, card issuer do not offer (nor will offer in the future) any kind of credit or possibility to stay at negative balance. Prepaid cardholder (you) spends money that was deposited, before the card was issued.

Prepaid cards are issued by leaders in credit cards industry and use badges like MasterCard, Visa, American Express, JCB or Discover - to mention the biggest ones. These cards have the full functionality of payment cards, when used online too.

Some prepaid credit cards allow users to load money only ones (when card is issued) and gift card is a very good example. Many other cards allow holders to add funds and cardholder loads the account of the card with any amount (minimum limit is usually arranged at low-level) of money, at any time.
You may load small amounts, as well, up to the predetermined card limit and then uses the card to make purchases the same way as a typical credit or debit card.

Prepaid Cards are ideal for kids and teenagers

Prepaid cards are ideal for children, who are above 13 years old. As we told before, there are no credit lines involved in prepaid cards. So, such cards are ideal solution for kids. Many big shopping companies, market such cards to teenagers. Why? Using prepaid card to traditional and online shopping, do not involve parents, to complete the transaction.

Beware of high fees of Prepaid Cards

Some prepaid cards issuers apply some kind of fees for obtaining and using such cards. Sometimes, it could be expensive way to spend your own money. Please beware of this and always check the monthly fees and all charges that are tied to such prepaid cards.

As everywhere in the life, there are advantages and disadvantages of using prepaid credit cards.
For sure, the advantages of prepaid cards usually outweigh the disadvantages. This is true for those individuals who do not have access to standard credit cards, due to their poor credit rating or lack of credit history.