Many people in the know are starting to make use of the prepaid credit card as a means to carrying cash and making convenient purchases both over the Internet and also in traditional bricks and mortar businesses. But what are the advantages of using this product instead of cash, a debit card or a traditional Mastercard or Visa?

1. Individuals with a bad credit rating or CCJs will find that they can’t get regular plastic from any source but will have no problems getting a prepaid version. Since you are not actually getting credit when you use this product there is no need for card suppliers to run a credit check when you apply. Also, if they are used sensibly they can give you the opportunity to build a relationship with a credit company while you have a bad credit rating meaning that in the future you will be able to make use of regular credit products.

2. When going on holiday the prepaid card offers a novel way of taking your money with you which also gives you protection in case of theft as no more than the cash you have prepaid onto the card can be stolen. Also, if you run out of cash when traveling someone from home can reload the card for you giving instant access to extra cash. These benefits make this product great for parents to give to their children when they are going abroad alone.

3. You decide how much money to put on the card so you can’t spend more than you have which should help you to budget your money better. This is great for people who are prone to overspending on regular credit cards that don’t want to lose the convenience afforded by them but need to improve their financial situation.

4. You can get one without having a bank account, so if are having trouble in this area you could just have found a solution to your problem.

5. You may be wondering why you would ever need one if you have your own debit card but the fact is these prepaid versions of Mastercard and Visa credit cards are more widely accepted.

6. If you want to pay for an expensive item and don’t want to carry money around with you then taking a card with the cash preloaded is an extra safe option.

As you can probably guess from the name when you get yourself a virtual credit card you will not actually get a solid object which you can hold in your hand. You will get a 16 digit number, an IBAN number, an expiry date and a security code just like the real thing so you can use it in exactly the same way.

Why use a virtual credit card

There are a couple of reasons why someone may choose to use a virtual credit card for transactions they make on the Internet. The first of these is the same reason that someone would use a standard prepaid credit card. That is they may not be able to access regular credit cards due to having a bad credit rating or may be too young to apply for such a thing.

THe other reason is that many people are still concerned about using their cards Online fearing that they could be a victim of fraud. With the virtual number you can load it up with a minimal amount of cash knowing that you can lose no more than that in the unlikely event that someone was ever to get a hold of your details.

Where to get your virtual money

The simplest way to get one is to apply Online. I know what you’re thinking, what’s the point of using a card Online to buy a virtual card to use Online? Well you can buy them online by sending a text message to the provider which make a charge to your mobile bill, or you can use a 360money e-voucher. Once you have a card in your possession you can reload with more money it whenever you want at the post office, by bank transfer or at places where you see the PayPoint Logo. IF you are in the UK then I suggest the first place you look when looking for a virtual credit card is Virgin. They offer reasonable prices, good service and you know your not going to get ripped off.

One answer to the problem which is proving very popular due to its easy availability and usefulness is the prepaid credit card. If you are looking for information on this extremely handy little piece of plastic then you have come to the right place.

Who Can Apply For A Prepaid Credit Card?

They can be applied for by anyone and because there are no credit checks carried out you have no worries of being rejected.

Can I top it up from my Bank Account?

Yes, you can also top them up online, at your local post office and wherever you see the PayPoint logo.

Can I Use A Prepaid Card Just Like Any Other Credit Card?

Yes, you just have to load the card up with your own cash and you can use it in exactly the same as you would a normal Visa or Mastercard. The cards only contain the money you put on them so any damage done if the card is stolen is limited unlike with regular plastic and you don’t have to worry about the extremely high regular credit card interest rates.

How Much Do They Cost?

Prices vary depending on the lender and the particular card you choose but expect to pay around £10 to buy your card in the first place and then another fee for each transaction. The price of top ups depends on where you get them, most are free but you may be expected to paya  small fee using certain methods.

Can I Use It To Buy Goods On The Internet?

Yes, the prepaid credit card actually has some advantages of some other methods of paying of products online. Given that that there is only a limited amount of money on the card there is very little financial damage that can be done to you in the event of fraud.

Does It Have Any Benefits Over A Debit Card?

The prepaid card is accepted in more places so having one will give you greater variety in the number of places you can shop. Also, you can get overdrawn with a debit card which can lead to additional expensive charges.

Some prepaid credit cards also have credit reporting facilities to help you demonstrate your credit history with some issuers reporting your monthly payments on cable, utilities and rent. With your prepaid cards, you might be charged a nominal fee in monthly installments and your card company would inform these installment payments to the credit bureaus. This helps you form a good credit payment history.

What are the benefits offered by the prepaid credit card?

Given below are some important benefits offered by pre paid credit cards that play an important role in paying off debt and making you debt free:

1. No credit card debt is accumulated

   As you’re prepaying your purchases with the help of a prepaid card, you’re not piling up a huge amount of credit that you might not be able to pay off in the future. You can make the need to settle credit card debt a thing of the past, which will relieve you of much of the stress associated with managing your finances.

2. No interest is charged on purchases

   When you use prepaid credit cards, your purchases are debited from the funds that you loaded on those cards. This is different from typical credit cards where everything you buy is subject to daily interest costs till you pay them off.

3. Designed for a student budget

   Some prepaid student credit cards can help you check your spending so that you can stay within your budget. Because you’d require cash available for prepaying your card, the cash you can load on your prepaid card must be only with what you can manage to spend.

4. Protection from over the limit and overdraft fees

   Though there are rare occasions where a manual or preauthorized deal might put you over your available balance on a prepaid credit card, most of the time, you wouldn’t be allowed to spend in excess of what is loaded on your card. This suggests that you can steer clear of costly overdraft fees and over the limit fees that often make your debt burden heavier.

Selecting the right prepaid credit card

Similar to many options that come with standard credit cards, prepaid cards can have various benefits, fees and features. It is always better to explore all your options to get the card that is most suitable for you. While selecting a card, you should compare the following elements:

• Card fees (reload fees, usage fees, setup or activation fees and inactivity fees)
• Reloading options
• Credit reporting features
• Load, spending and card limits
• ATM and cash withdrawal limits

The approval process for a prepaid visa card is simple and there is no necessity of a credit check. The cards can be reloaded online within minutes. However, the application fee is somewhat higher than usual credit cards.

On the other hand, what are we supposed to do if we don’t have any property, need cash and can’t find a lender to part with the money we need. This is where companies which offer unsecured personal loans come in. Also called tenant loans because they allow people who rent rather than own their home to get credit easily and at interest rates that isn’t in the same league as those charged by payday loans companies. You won’t be able to get as much cash as if it was secured on property but for times of emergency when you need cash they can be a lifesaver.