Advantages of PrePaid Credit Cards

As the money is pre-loaded, they are beneficial to those who may not pass a credit check, or do not wish for a credit search against their name, such as people with a poor credit history, or newly arrived migrant workers. Some cards are available to people aged under eighteen, and are therefore an increasingly popular way of giving `pocket money` to young people, or family members leaving home for the first time (e.g. university). You are also able to get additional cards from the same account, meaning you can set up one to be used by more than one person, or to have a spare card for yourself. Unlike a credit card, there is usually no extra charge for using the card to draw cash out of an ATM machine (in contrast, credit cards will usually charge a higher than normal rate of interest, plus an extra cash fee of around 2.5%, plus they will allocate your payments to the cash element of your balance last, making it very expensive).
Pre paid cards are a good way of budgeting, either for yourself or another person, as the card does not go into `overdraft` or incur any other charges associated with borrowing on credit. This removes the risk of debt, which is a major downside of credit cards. They can come in Visa and Mastercard varieties, which are accepted around the world, wherever the relevant logo is displayed. It is even possible to get special foreign currency cards, which can give a better exchange rate than is available when exchanging cash. Pre paid cards are seen as being safe against fraud, and can be cancelled if the card falls into the wrong hands, as well as the peace of mind offered by the `chip and pin` scheme.
Disadvantages of Pre Paid Credit Cards

Sometimes there is an application fee for new cards, but you will be able to check and compare this before applying. Likewise, there may be a monthly subscription fee, which may include certain benefits such as extra top ups, online account management or discounts on products. Another thing you can check is whether there is a fee for loading money onto the card, or conversely, an inactivity fee if the card is not used for a certain length of time. The card provider has to have some way of making money, so you should expect some form of fee, although this might be done when the account is terminated, or when a new card is provided.
Conclusion

Pre paid cards are a good way of spending money while travelling on holiday – if you lose the card, all you lose is the amount pre loaded. For similar reasons, they are a good way of giving money to young people or dependants, and also allow you regulate how much money you give them, while giving them the flexibility to use the money online or in places where cash is inappropriate. Payment options can also make the process hassle-free, as a monthly direct debit can be set up to pay a certain amount onto the card each month, without you needing to go to the bank each time – this still allows you to put extra funds on if you wish. To save money when getting a pre paid credit card, you can search for finance discount codes, to help you use your money more efficiently, while saving time.