Prepaid cards are one of the popular ways of using your money throughout the UK or even abroad for the frequent traveller. They come with their strengths and weaknesses but getting one can definitely pay off in some form or another.
Prepaid cards are loved by many due to their different uses. Here are five occasions when you might find a prepaid card the best to use under the circumstances.
1. Improve bad credit
You probably have heard that prepaid cards have no effect on your credit history, whether negatively or positively. However, due to the fact that many people have bad credit and would love to improve their credit rating, prepaid card providers now offer ways of doing exactly that.
Many card providers today offer prepaid cards with an option to add a credit record rebuilding feature at a small fee.
Credit builder prepaid cards come with a feature for a monthly fee which by paying will be taken as a loan repayment and will be reported to credit agencies enhancing your credit record. Most are provided for 12 months at a time. After about three months the effect of the prepaid credit builder begins to be seen.
Typical credit builder prepaid cards also allow you to enjoy prepaid card features such as purchasing items with preloaded funds. Your credit record won’t be checked or verified before you can receive a prepaid card. However, other documentation such as proof of residence, employment etc. depending on the provider might be requested.
2. Perfect traveller companion
One of the best things about prepaid cards is the ability to use them anywhere. They’ve moved from being mere debit cards to the most ideal financial companion rather than cash or traveller cheques. In fact, most card providers today offer prepaid travel money cards that you can use virtually anywhere around the world to access just about any service.
Since they’re either MasterCard or Visa processed, two companies with a global reach, you’re guaranteed they’ll be useful even in the most remote areas of the globe and anywhere around the UK.
While purchasing prepaid cards for travelling abroad compare widely. Some come with zero charges while withdrawing in ATMs globally or using them for specifics such as shopping, restaurants or online purchases. Compare travel cards on Lending Expert.
3. Improves budgeting discipline
Not everyone has spending discipline. At times a little financial discipline is very critical. If you want to always work within your budget, it helps to attain some discipline, especially for those always spending beyond their means and incurring heavy credit card charges. Prepaid cards allow you to load a specific amount of money. You can’t overspend or access credit facility with these cards; you’re only able to use what you have.
Prepaid cards can help you avoid overspending and only use amount set apart for that particular time. The temptation for overdrafts is curtailed as well. You’ll also be able to understand your spending patterns and what you can do to manage your money better.
Prepaid cards have the same security and safety features as any debit or credit card. Withdrawals require a PIN. Keep your PINs safe and avoid sharing them with anyone. If you lose the prepaid card, call the provider and have it frozen right away. Note that even if the PIN is stolen and card used only the amount on the card will be lost, and there won’t be any access to your bank accounts.
4. Get extra cards for your family
Once your teenagers are of age, you might want to make them financially independent while teaching them prudent financial management. You might also want to offer access to specific funds to your friends, partner or parents. Prepaid cards are superb at this. With just one prepaid card simply request the provider for other linked cards for the people you love. Compare prepaid cards for children on Lending Expert.
Prepaid cards are also perfect for businesses where a few employees require certain purchases occasionally. Compare prepaid business cards on Lending Expert.
5. Automate payments
You can actually automate certain payments with ease. A number of prepaid card providers allow you to set up specific arrangements for automatic transfers of a specific amount of money each time towards the payment of certain things like mobile phone bills, utilities, house rent, among others.
Prepaid cards are perfect for automated accounts, particularly for individuals with bad credit who cannot access current accounts.