Prepaid Credit Cards - Frequently Asked Questions

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What is a prepaid credit card
Why would I want a prepaid card?
What fees/charges are there?                                            
Prepaid card uses and benefits
Application requirements for prepaid cards
Where to buy a prepaid credit card
Where can I use a pre paid card?
Can I use prepaid cards abroad?
Lost/stolen prepaid cards
How to load money on to prepaid cards
Is there a card top up limit?
Is there a prepaid credit card statement
Minimum age for prepaid card applications
How many cards can I have?
Which prepaid card is best for me?

What is a prepaid credit card?

Essentially, it's a pay-as-you-go debit card. Money is loaded on to the card and
it can be used to pay for purchases in shops, restaurants and online, or to withdraw
money from a cash machine. You can only spend what has been loaded on to the
card, so you can't get into debt. Most prepaid cards are provided by Visa and
MasterCard, and are widely accepted around the world. A prepaid card looks just
like any normal credit or debit card, with a card number, signature strip and
company branding.

Prepaid cards are unlike credit cards, which provide you
with a line of credit. They are also very different from debit cards that are linked
to a bank account with an overdraft facility. This is because you can't borrow
money with a prepaid card - you can only spend the money you have loaded
onto it. 

There are many types of prepaid cards available for different purposes. You'll see
gift, travel and everyday money cards, to name but a few but they all share the
same benefit of being safer and more convenient to use than cash.
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Why would I want a prepaid card?

Although you can get prepaid cards for use in this country, most are aimed at
those heading abroad. They are popular with holidaymakers and travellers;
parents get them for children on gap years, as the card can be topped up from
here in the UK as and when their offspring run short of money. Cards tend to
be available in euros or dollars although Caxton FX has recently launched a
Global Traveller Card that can be used if you're going outside the euro or dollar
zones.

As when you use a credit or debit card abroad, you benefit from the Visa or
MasterCard exchange rates which tend to be better than those available from
bureaux de changes and high-street banks.
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What fees/charges are there?

* Card application fee - to set up your account and provide you with a card.
Check with your card issuer.

• Monthly service charge - this may entitle you to certain services such as a
helpline or on-line service.

• Card loading fee - to load more cash onto your prepaid card. This may vary
depending on how you top up your card (if you load funds onto your card
from a bank account, you may be charged a fee by your bank).

• ATM withdrawal fee - there may be a charge for withdrawing money from an
ATM (cash machine). A higher charge may apply when withdrawing money
from ATMs abroad. You may also be able to use certain ATMs free of charge
and/or make a   limited number of free ATM withdrawals or deposits each
month.

Purchase or on-line fee - you may be charged for each transaction, or for certain
types of transactions.
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Pre paid card Uses and benefits

A prepaid card is an ideal solution for you if you:

• want to give someone a gift - a MasterCard, visa card, or  Maestro prepaid
card is more widely accepted than vouchers or store gift cards.

• are travelling abroad and don't want to carry cash or traveller's cheques.
A prepaid card is more secure because it can be blocked if it's lost or stolen.

• want to help younger family members learn about managing their money.
They can only spend as much money as is loaded onto the card, and the
spending can be viewed on-line.

• want to manage your money by separating it into different places for
different purposes. You could have one card for everyday shopping, one
for travel, one for on-line purchases, etc.

• are having difficulty opening a bank account or getting a credit or debit card
for some reason. You don't need to pass a credit check to get a prepaid card.

Things that a prepaid card may be used for:

• Everyday shopping

• Internet shopping

• Mail order and telephone order

• Topping up your mobile phone

• Paying bills

• Paying monthly subscriptions

• Withdrawing cash from ATMs

Benefits for cardholders

Convenience

• Prepaid cards can be used wherever MasterCard and/or Maestro cards are
accepted

• Anyone can get one - no need for credit checks or a credit history

Money management

• Can help you budget your money

• No interest charges on the card

• There's no danger of going overdrawn on the card. Once the money loaded
onto the card has been spent, you can't spend any more until you've
reloaded it

Security

• Carrying a prepaid card is safer than carrying cash. The card can be blocked if
it's lost or stolen
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Application requirements for prepaid cards

You will need to provide proof of your identity and your address when applying for
a reloadable prepaid card - but that's all. There are no credit checks or any other
information that you need to provide. There are no such requirements for disposable
prepaid cards, which can’t be reloaded once the already pre loaded amount has
been spent.

When you buy a 'prepaid gift card' for you or someone else, you don't usually
need to provide identity or address details. These cards may be given to family
and friends, who can then use the card like a gift voucher until the money loaded
onto the card has been spent. This type of card cannot be re-loaded.
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Where can I buy a prepaid credit card?

You can purchase a prepaid card via this website today. Once you have been
given or sent your prepaid card, you will need to activate the card by following
the instructions from your card provider.
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Where can I use a pre paid card?

You can use your prepaid card wherever MasterCard, visa and/or Maestro are
accepted, including: retail shops, over the Internet, mail order and by phone -
at home and abroad. To keep track of your spending every time you use your card
the balance will be checked electronically with your card company before payment
is made. In some circumstances your card may be declined because there is not
enough money loaded onto it. This security feature exists to protect you from
spending money that you do not have. Check your balance by sms text msg
or online.
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Can I use prepaid cards abroad?

You can use most prepaid cards anywhere in the world that accepts MasterCard
and/or Maestro cards - just like a debit or credit card. Please check with your card
 provider for details.
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Lost/stolen prepaid cards

If your card is lost or stolen, you must report it to your card company immediately.
Usually your money will be frozen so no one else can use the card. You will then
be sent a new card with your remaining balance on it. Some card companies will
voluntarily replace money stolen from your card - but not all of them do.
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How do I load money on to prepaid cards?

There are a number of ways to reload (or 'top up') your card, for example: cash
top-up at post offices or convenience stores, paypoint & payzone outlets, by funds
transfer from a bank account, or on-line through the Internet. Have your
wages/salary deposited by your employer on to your card. The ways in which you
can reload your card will vary. Please read the information provided by the card
provider for details of how and where you can load money onto your card.
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Is there a card top up limit?

Some card companies may set a limit on how much money you can load onto
your card at any one time. For prepaid cards that you can buy without any proof
of address and/or identity, the maximum amount of money that you can load onto
the card will generally be much less when compared to reloadable cards which are
generally in the region of £3 - £6000.
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Is there a prepaid credit card statement?

Yes, many card companies provide this option. When you pay with your card
details of the transaction are stored on-line. This information includes the dates
locations and amounts of your transactions. All of this will appear on your on-line
statement, so you can check and access details easily.
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Minimum age for prepaid card applications?

Prepaid cards are generally available to all ages from 13 yrs, although some
companies require you to be at least 18 years of age to use their cards.

There will be restrictions on cards that are available to persons under 18 to prevent
their use for inappropriate spending (e.g. gambling and alcohol).
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How many cards can I have?

There are no limits on the number of prepaid cards that you can hold.

Bear in mind that there could be fees and charges for each card that you buy
think carefully about how you will manage these costs.
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Which prepaid card is best for me? 

There are many types of prepaid cards for you to choose from. Look at the
features of each card and consider those which are important to you, such as
on-line account management, the ways in which you can reload the card, and the
availability of additional cards on the same account. It makes sense to choose a
card that has low fees and charges for the way in which you want to use the
card most.

For example, if you just want to use a prepaid card for travelling abroad, a card
that has low foreign exchange fees and overseas charges is likely to be the most
appropriate. Shop around to find the card that has the best deal for you, then
compare the features and benefits on offer.
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