How does prepaid credit card work?
We live in the age of cards, whether they are debit or credit, no one can deny that they help us and save our lives.
But after all, what is prepaid credit card?
This type of credit card is similar to debit card. To use it you will need to recharge the card after joining, the amount you can use is the amount that will recharge. In the prepaid credit card it is not possible to make installment purchases, only cash purchases.
Should I have an international prepaid or prepaid card?
This type of card is especially suitable for those who cannot open a bank account, who will use the card only on occasional occasions, or who will have reduced spending by choosing prepaid compared to spending with the bank.
However, depending on the use you will make, opting for a checking or savings account may also be good avenues for your investments. Therefore, it is worth consulting with banks to determine which option is best for you.
What are the advantages and disadvantages of having a prepaid credit card?
All cards have advantages and disadvantages, just like every choice we make in life. We need to look at both sides before making a decision.
- Spending control, with it you will not extrapolate on purchases, and will not lose control of your finances.
- Make purchases on sites that only accept credit cards. Even though it resembles a debit card, it is still a credit card and is therefore accepted for hiring some services and on sites that do not accept debit cards.
- You do not have to have a bank account, you can apply for the card even if you do not have a link with any bank.
- Control your children’s spending. You can purchase a prepaid credit card for your child and thus limit their monthly expenses.
- No need to prove income.
- This type of card cannot be used for emergencies, if you have no available balance you will not be able to count on it in unexpected situations.
- Making purchases on time is not possible, making it a disadvantage for some people.
Is there a charge for prepaid credit cards?
Yes, even if they are not directly linked to any banking institution, prepaid credit cards do charge some fees from their users. Some cards have the membership fee, ie when you buy the card you will have to pay a fee to the cardholder. While not essential, it can be used when considering options to choose which card you will purchase.
If you top up the card and for some reason wish to withdraw this money, a fee will be charged. All cards have a withdrawal fee, but it varies by company. Some companies also charge a kind of card monthly fee, it may resemble credit card annuity or bank account management fee.
Your card can be topped up via bank slip, COD or DET. Some companies charge a top-up fee when you choose to place the balance through a bank slip, although they do not charge the fee when you top up through COD or DET.
Its benefits are almost indisputable, but choosing the one that best suits your needs and expectations is essential. With several options in the market it is important to analyze and research before purchasing a prepaid card.