Everyday use
A card that you load with money and use just like cash or a debit or credit card for your everyday spending and withdrawing cash. Often has a monthly fee
Get a prepaid card that makes it cheaper to spend abroad
Enjoy rewards or cashback when you spend
You won't need a credit check to apply
Pre-paid cards, sometimes called everyday spending cards, are debit cards that operate on a pay-as-you-go basis. You can simply top it up with money whenever you want to use it and spend as you would normally.
Pre-paid cards are worth considering if you can’t get a bank account. And they’re equally handy if you’re looking to limit your spending, because you can only spend the money you’ve loaded onto the card.
As well as everyday spending pre-paid cards, you can get pre-paid cards designed for travel that allow you avoid the high fees that some credit and debit cards charge for using them overseas.
There are a range of specialist prepaid cards to choose from, depending on your requirements. They include:
A card that you load with money and use just like cash or a debit or credit card for your everyday spending and withdrawing cash. Often has a monthly fee
A card that you can load with Euros, Dollars or multiple currencies and avoid any transaction and exchange rate fees when you head overseas
A prepaid card can help children learn the value of money and see how much they’re spending.
Pick a card that’s right for you. It might be one that offers fee-free spending on a currency used at a location you frequently visit
There are no credit checks, but you are likely to have your ID verified. There might also be a one-off or monthly fee to pay
When you receive your card you can load it with your chosen currency and it’s activated and ready to use
Use the card as you would a debit card. When funds run low, top it up from your current account or have your wages paid directly onto it
There are advantages and disadvantages to prepaid cards. These include:
Avoid high transaction fees when spending abroad
Get rewards or cashback on your spending
Control budgeting by not spending more than you have
No credit check required - although some cards can help you improve your credit rating
Pay a monthly or one-off charge for the card
Face further charges for reloading funds onto your card and inactivity fees
Not covered under Section 75 of the Consumer Credit Act that protects credit card purchases between £100 and £30,000
Could struggle to top up a prepaid travel card when you’re abroad
The best card for you will differ depending on how you plan to use it. Consider the following:
If you’re going to use the card frequently, an everyday prepaid card with a monthly fee but no transaction fees may be more suitable. A pay-as-you-go card could suit occasional users better as they are often free, but charge fees when spending
If you’re planning to use the card when you travel overseas, look to choose a prepaid card that is fee-free for the currency of your destination. This can save you a significant sum in travel-money spending over the course of your trip
If you’re looking to get a prepaid card because you have a low credit rating, an everyday card with a credit builder facility can be a way to help build your credit rating
We’ll show you the key features of each prepaid card, including introductory deals and any fees you’ll pay
We’ll list the main advantages and disadvantages of each prepaid card to help you make the right choice
Once you’ve made your decision, just click through to the card provider to apply without a credit check
Depending on the type of prepaid card you get it could improve your credit rating, if you've got an impaired credit history. There are no credit checks with prepaid cards, but some everyday prepaid cards allow you to borrow the annual fee and pay it back in monthly instalments. This gives you a repayment record that will be put on your file by the credit reference agencies. Beware that if you miss a payment it could damage your credit rating even further.
When you apply for a prepaid card, the provider won’t carry out a credit check. However, if you use a prepaid card wisely, you could boost your credit score. A better credit rating will unlock better terms when you apply for credit. Keep up with your credit score with our Credit Score tool, we’ll also send you helpful tips and tricks to improve your score
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Check out our choice of prepaid cards from a wide range of leading UK providers
We’ve listed the benefits of each card along with any fees you might be charged
Once you’ve made your decision, just click through to the card provider and apply online in minutes
There are several ways your money could be loaded onto a prepaid card. These include:
Have your employer pay your salary straight onto the card
Transfer money from your bank account
Add, or reload, funds at partner retail locations or a branch of the bank or building society
Yes, there are often fees associated with prepaid cards. It is a good idea to understand how they are charged before you apply for the card. The types of fee you might face include:
One-off or monthly fee
Transaction fees on your spending
Loading fees when it comes to topping up the card
Inactivity fees if you don’t use the card for an extended period
Withdrawal fees are charged by some card issuers
Yes, prepaid cards work in the same way as debit and credit cards when it comes to spending. You just key in your card details and the payment will be taken digitally.
A prepaid card is different from a credit card or debit card because you can only spend the money you have loaded onto the card.
This means unlike a debit card (where you may be able to go overdrawn) or a credit card (where you are borrowing money before paying it back at a later date), you are only spending your own cash and cannot run into debt.
There can be a variety of ways to check your balance on a prepaid card, including logging into your account online or through an automated phone line. You may be able to check your balance at an ATM and some cards also give you the option to receive card balance updates through text.
Lots of household-name brands/service providers, such as ASDA, the Co-op and the Post Office, offer pre-paid cards that are powered by Mastercard. These take in prepaid travel cards as a substitute for travel money, general purpose cards and youth-targeted cards.
Money held on a pre-paid card is classified as electronic money. And under UK operating rules, pre-paid card service providers are obliged to hold your cash in a separate bank account, where it's kept entirely apart from the card issuer's operating capital.
With this in mind, as long as the card issuer has observed the rules, and it went bust, your cash would still be held in a bank or building society and would be protected. With the result that you'd be able to get it back.
However, it's worth bearing in mind that if the building society goes bust your cash is not protected. So you may want to choose a card provider that stores your money in a big-name high-street bank that's likely to be more stable.
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