Prepaid credit card is more like managing a checking or savings account than managing a credit card. What you have in your account is all you’re able to spend. There’s no revolving balance or due dates to think about.

Prepaid credit card is a payment card (usually MasterCard, Maestro, visa electron or Amex), and much like gift cards; pre-loaded with your own money. You don’t need a credit check to get one, and it’s accepted at the same locations as a normal debit or credit card, including on the internet and abroad (internationally). They are the same as credit cards, but without the credit because it is not a traditional credit card, it doesn’t report transaction history of the card holder to credit rating bureaus and in the process does not help in building credit.

The big advantage of the prepaid card is according to the providers that the product will prevent youngsters from falling into debt since money cannot be spent beyond the amount already loaded onto the card. It also helps control your credit card spending with prepaid limits.

Prepaid Credit Card

Another benefit of prepaid credit card is extremely useful when you’re traveling or on holiday. Firstly this is because a large proportion of credit card fraud happens abroad. If you are using your normal credit card or debit card you stand to lose a lot of money. Fraudsters can empty your accounts or rack up huge credit card bills in your name. However a prepaid card is not linked to your bank account so you are protected. If you use a prepaid card the maximum you can lose is the remaining balance on your card.

There are several prepaid cards that are specifically for use abroad and allow you to spend abroad without foreign currency commission or transaction charges. A prepaid card will save money as it will limit your spending abroad. Using a prepaid card on holiday will therefore help you keep tabs on your spending and you won’t have to come home to a horrible bill.

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