What are Prepaid cards?
Prepaid cards work like any other card in principle.
You can use them to withdraw money and buy stuff online and offline.
What makes them unique?
Prepaid cards are however uniquely different from credit or debit cards in the way they work.
Prepaid cards can be obtained without a bank account. You can buy them from supermarkets or a simple Google search should reveal a few providers
Loading money to a prepaid card
For a prepaid card to work you need to load money onto it, sometimes you can do this by taking cash and paying it into a pay point.
Some prepaid cards will have apps where you can upload money and manage your account.
Benefits of prepaid cards
Prepaid cards are very good as they allow you to have access to a card even if you might not be able to get a bank account due to a low credit score.
Prepaid cards are also very commonly used as travel money cards where you can buy a prepaid card in a foreign currency so you can spend on holidays.
**Some more benefits:
- No bank account needed
- No possibility of overdraft; you only spend money you have
- If lost or stolen, loss is limited to what’s loaded onto the card
- You can use them almost anywhere, get cash from ATMs, or even have your paycheck deposited directly to the card
- Good for people with poor credit
The disadvantages of prepaid cards
They don't help you build credit, they have quite a few fees and some might have maximum amounts you can load on to them.