Going back to basics with prepaid credit cards

Your Credit Connection

Bad credit

Going back to basics with prepaid credit cards

24th January 2011

Prepaid cards have revolutionised the way that we handle payments – allowing many of us to handle our money better than ever before. However, there can be some things to watch out for when you are using this new form of e-commerce, in the form of the various fees which can be levied by your card provider. In this article, we are going to look at the different fees which are commonly seen on these cards, expenses which can be applied to the service you are given in different combinations.

If you have a card which is reusable and reloadable, you will no doubt know that you need to top it up like you would a ‘pay and go’ card which are commonly used for mobile phones that are without contracts. However, with some of the methods which are presented to you for topping up your card, such as a PayPoint or a Payzone, you can find that you have to contend with a percentage of your top up amount being deducted as a service charge every time you add money onto your piece of plastic.

Also, you can find that you are charged a service fee for every time you use your card in a shop through the ‘Chip and Pin’ system in the UK. This could be for as much as 3% of the total value of the items which you are buying. Bearing this in mind can ensure that you budget your money correctly and that you don’t get caught off guard.

Things can really get expensive in some respects when you want to withdraw money from an ATM using your prepaid credit card, something which you should be capable of doing if you have a Visa or a MasterCard. With some providers, you could find that it is £1.50 for each time that you use your prepaid credit card to withdraw the money you need, so it can be worthwhile for you to do this sparingly and to do it in large quantities instead of losing valuable cash when you are doing it little and often.

You could even be charged for having the privilege of a prepaid credit card on your person. In these circumstances, it could be as much as £6.00 for each month that you are registered with the card, and this is after the fee you are charged to apply for a card, receive the physical card, and to buy subsequent cards afterwards. Be careful if you want to cancel the card, too – this can have a cost attached to it, as can moving money off the card which you might not want there anymore.

Customer services can also be a costly experience – with the phone lines which are available to you potentially being rather expensive.

It could be said this article paints quite a negative picture of prepaid credit cards – however, by comparing services and thinking about the services you use the most, you can ensure that these services are provided to you by a card which doesn’t charge for them, saving you money.

Posted in Prepaid credit cards

Contact Us | December 5th, 2020