Prepaid cards are a relatively new payment method but have become increasingly popular as an alternative to cash and cheques. Unlike credit or debit cards you are not required to have a bank account, nor is there any link back to your personal identity, making them great for added security. However, all this does come at a slight cost, so here are some tips to keep prepaid credit card costs to a minimum.
Compare prepaid cards
The most important thing to do before opening up any prepaid card is to compare what is available on the market. There are so many different types of prepaid credit cards that you could end up paying too much for a card not suited to your needs. The best way to ensure you are getting the best deal is to compare prepaid cards. Here are a few of the fees and charges that you should be looking at when running a comparison:
• Reload fees
• Monthly fees
• Purchase fee
• ATM fee
• Foreign transaction fee
• Card issue fee
Use a card designed for your needs
The great thing about prepaid cards is that there are so many available, each being best for a specific need. Prepaid travel cards will have different fees associated with them than let’s say a prepaid business card. It is essential that you do choose a card suited to you because card providers do amend the fees accordingly.
Reloading
Many prepaid credit cards have reload fees associated with them, and these can often be the most expensive outgoing. To try and keep costs down you could request that your employer pay your wages directly onto your prepaid card, avoiding reload fees altogether. You can then use the prepaid card as if it was a debit card, without the worry of paying out lots of reload fees. If paying your wages direct is not a feasible option for you, another great way to avoid the reload fee is by transferring cash from your bank account via BACS credit. If you can’t take advantage of either of these options, make sure you take into consideration the cheapest way to load your card before doing so.
Purchases
If the prepaid credit cards you choose do incur a purchase or transaction fee, it is important to think about how you shop. Try and ensure that you are able to buy as many goods as possible in the one transaction rather than several smaller transactions as this will keep the costs to a minimum. Making several different purchases will incur a transaction fee each time, increasing the cost of using your prepaid card.
Prepaid cards are an excellent way to help you budget, avoid any high interest payments and credit checks, and are simple to use anywhere in the world. By using them sensibly and making sure you compare prepaid cards, you can make the most of this convenient, safe, and secure payment method.
