Everyday

Prepaid cards are not eligible for protection under the Financial Services Compensation Scheme

Everyday prepaid cards

Offering flexibility, security and control, prepaid cards are payment cards that are pre-loaded with money. And everyday prepaid cards are a great alternative to credit cards, debit cards and simply using cash to cover your everyday purchases. 

They are a good option for anyone whose credit score – or lack of credit history – means they would find it hard to be accepted for a market-leading credit card, for example.

No credit checks

To be accepted as a customer by most banks and credit card companies, you must have a credit history. To qualify for the best deals, meanwhile, you will need a high credit score. 

However, there are no credit checks with everyday prepaid cards. You will therefore be accepted as long as the company offering the card can verify your identity using your personal details.

For those keen to improve their credit scores, meanwhile, some everyday prepaid cards allow you to borrow the annual fee and pay it back in monthly instalments, thereby giving you a repayment record that will be put on your file by the credit reference agencies.

But beware: you could damage your credit rating even further if, for example, you miss a payment.

Easy to use

Everyday prepaid cards can be funded monthly, for example from your bank account, or even via your employer paying your salary on to the card, or they can be fed on a pay-as-you-go basis.

You top-up the latter type of prepaid card in a similar way to topping up a pay-as-you-go phone – so either at Payzones that can be found at over 30,000 locations in the UK, by using your mobile, or with a debit card. When you make a purchase, the amount will automatically be deducted from the card balance.

For all your shopping needs

Everyday prepaid cards can generally be used anywhere that you could use a debit or a credit card. They are particularly good for shopping online, as they limit your exposure to fraud because they are not linked to a bank or credit card account.

Wherever you use your prepaid card, though, you cannot borrow money – making it impossible to overspend and get into debt. For many people, especially those on a budget, this imposed discipline is the biggest advantage of a prepaid card.

Other advantages

Many everyday prepaid cards reward you for spending, often by offering cashback or access to exclusive discount voucher codes.

Some cards also come with one or more ‘companion’ cards, allowing you to send money to friends or family anywhere in the world just by loading up your own card. 

On the flipside, however, you must be aware of the charging structure. Pay monthly cards generally have a monthly fee, which can be up to about £12 a month, but don’t charge for purchases.

Pay-as-you-go cards, meanwhile, tend to charge more for cash withdrawals – up to £2 per withdrawal in the UK – and for purchases, but have no monthly fee.

Find the best deal

With MoneySuperMarket, you can compare and apply for a range of everyday prepaid cards with ease to ensure you're getting the right one to suit you.