Pay-as-you-go prepaid cards are a great choice for parents keen to keep a lid on their children’s spending. Aimed mainly at teenagers and students, they have no monthly fee. You can find the best deals here on MoneySuperMarket.

Pay-as-you-go cards

A prepaid card is a payment card that is pre-loaded with money. Once you've loaded money onto your pay-as-you-go card, you can therefore use it to shop online or take cash out of a cash machine, just as you would with a credit or debit card.

However, pay-as-you-go prepaid cards, in the same way as pay-as-you-go mobile phones, do not allow you to spend more than you can afford. So while they are often targeted at teenagers and students, their in-built discipline means they are also useful for anyone trying to stick to a budget.

Safer than cash, they are also a secure way to shop online, and they can be bought as gifts in the same way that you might give someone cash or a cheque.

Safe spending

It is all too easy to overspend and get yourself into debt if you use a credit card, or even a debit card if it is linked to an account with an overdraft facility.

Young people particularly often find it tempting to spend more than they have. That’s why many parents prefer to give their children a pay-as-you-go prepaid card that only allows them to spend the amount that has been put on to the card, but still means they can shop online.

Another advantage is that carrying a prepaid card is a lot safer than having a pocket full of cash. After all, lost or stolen prepaid cards can simply be cancelled and replaced, but cash that disappears has usually gone for good.

Available to all

You need a clean credit history and a good credit score to qualify for many of the best credit cards on the market today. But it is much easier to be accepted by a prepaid card provider. 

Even youngsters with no credit history, as well as anyone recently arrived in the UK, can qualify for a pay-as-you-go prepaid card. You will be accepted as a customer as long as the company offering the card can verify your identity using your personal details.

Secure online shopping

Nowadays, many of the best bargains and deals are found online – not on the high street. However, some people are worried about sharing their credit and debit card details on the internet.

Pay-as-you-go prepaid cards, which are not linked to a bank or credit card account and so limit your exposure to fraud, are therefore a great way to shop online.

No monthly fee

Unlike some credit cards, pay-as-you-go prepaid cards have no monthly fee. You must, however, look out for other fees such as transaction charges when choosing your pay-as-you-go prepaid card.

Cards of this kind are also generally limited to a maximum of, say, five transactions a month. If you are looking for a card for everyday use, you would therefore probably be better off with a pay monthly prepaid card.

Find the best deal

You can compare a range of pay-as-you-go prepaid cards with MoneySuperMarket, so take a look at what's on offer to ensure you choose the right deal for your circumstances and preferences.