Guide to Prepaid cards - 2/5

Prepaid Card uses and benefits

The prepaid card may be a relatively new idea, but it has no shortage of uses, including:

Buying groceries and petrol
As a replacement for travellers cheques or travel cash for a low cost alternative to paying for goods and services abroad
Topping up your mobile phone
Internet shopping including eBay
Paying bills
Transferring money to friends and family either in the UK or overseas (known as remittance)
Withdrawing cash from an ATM

They have particular appeal to those including

People who wish to use foreign currency on a holiday
Newly arrived immigrant, who although earning, cannot yet obtain credit due to having no credit footprint in the UK
A person who has a poor credit rating or a history of bad debt who cannot get a credit card
Parent of a young person travelling abroad.

There are numerous benefits to the prepaid card. These include:

Availability - There are no credit checks, which means you can get a card without worrying about your credit history. All prepaid card providers will carry out an Identity check to confirm you are who you say you are.
Control - prepaid cards are an ideal way to budget for yourself or help to manage your children's spending. Like a credit card you get a full breakdown of spending on the card so you can see what has been purchased, who from and when.
No debt risk - With a prepaid card there is no chance of spending too much as you are limited to the amount you put on your card.
The card for travel - As well as being able to top up the card, depending on the specific provider, you will be able to use it at ATMs worldwide. Many providers now offer dollar and euro cards and offer a better exchange rate on their travel cards than what is commonly available from bureau de change.