What is a prepaid card?
Prepaid cards can be loaded with a set amount of your own cash. You can use prepaid cards in most places that accept credit or debit cards.
You can only spend what money is available, so no overdraft and no debt. A lot like pay-as-you-go sim cards, prepaid cards are a good option if you need some discipline in your budgeting.
Is a prepaid card right for me?
If you’re living on a tight budget, prepaid cards could be the way to go. You’ll be less likely to feel tempted by unnecessary purchases and you could earn cashback. Some prepaid cards (like CashPlus) offer a credit builder option where you’re given a small interest-free loan to build up your score.
If you’re lucky enough to be planning a trip abroad, you may want to consider an overseas prepaid card. It can feel risky taking cash abroad so put your mind at ease and check out the FairFX Sterling Everywhere.
Watch out for fees
A lot of prepaid cards on the market come with fees so bear this mind when choosing a card. Some come an initial card fee, some with a monthly subscription, others charge per transaction. Compare your options and find the best card for you. Don’t get caught out.
Mark joined Choose Wisely in 2015. He continues to work in close contact with the providers, brokers and journalists operating in the world of consumer credit.