Prepaid Credit Cards

[Allen]

Does anyone here use one? Are they any good for helping stick to a budget? Are they expensive to use?

[kellyharding]

I've got one, an O2 money one, doesn't cost me anything to use/etc. Though I've not used it as yet as I haven't gotten around to putting money on it...

Most others charge you an annual fee mind.

There tends to be caps to how much you can put on them too.

For me I figured it could be useful to have for when I need to buy something and a site doesn't support Meastro.

[mikerr]

Do you still get the same level of protection as credit cards?

Can you do a chargeback?

[TAKTAK]

My sister uses the O2 one, and she loves it

I couldn't be arsed with having to plan ahead on buying things...

[kellyharding]

Do you still get the same level of protection as credit cards?

Can you do a chargeback?

I don't think you do. It's closer to a Visa/Mastercard Debit Card than a proper credit card I think.

As for chargeback I've no idea off top of my head, may well depend on the supplier.

[kellyharding]

My sister uses the O2 one, and she loves it

I couldn't be arsed with having to plan ahead on buying things...

Theres still a fair number of sites that won't take anything other than Visa/Mastercard, and as my bank won't give me anything other than a Maestro card, this gives me a useful option for online purchases.

[Zak33]

Pre Pay?

Credit?

lmao....
is that what they're called?

That's gotta be a trading standard issue for starters, no?

A credit card is where you use it BEFORE paying for the items yourself.. hence CREDIT

[Funkstar]

is that what they're called?

No I think it was just the wrong terminology in the thread title

The O2 one is called a "Load & Go" card.

In general, when people see the Visa or Mastercard logos they still think "credit card" even though both firms have had debit versions for quite some time now. lets face it, it might be the wrong name for them, but we all knew what Allen meant by the subject.

edit Both the Visa and mastercard sites call them just Prepaid cards.

[Saracen]

Do you still get the same level of protection as credit cards?

With almost all of them, no, you don't.

One major protection with credit cards (and to a lesser extent and via a different mechanism with some debit cards) is the "joint liability" protection from s.75 of the Consumer Credit Act.

To be clear, the CCA does not give protection for debit cards. Some, however, provide a voluntary scheme with some of the same features. But with a credit card, for items costing over £100 (and under £30k) the card company is jointly liable.

There is ONE prepaid card where this protection apparently exists, because of the was they implement the card, which effectively is a credit agreement to the extent of the monthly fees, which operate as a loan, and that kicks the CCA into effect, but it's the only one as far as I know. For most, it doesn't apply. So it's not the money you preload on the card to spend that counts as credit, but the "loan" for the provision of the card, which you then pay off monthly. The theory is that if you pay it off every month, at the end of the year, your credit record is updated to show a 12-month loan, paid fully and on-time, helping to improve a poor credit record. I've no idea if it helps in practise.

But the downside of that is that you need to be sure to pay the monthly fee without fail, or it will show as missing a loan payment and adversely affect your credit record. Conversely, most prepaid cards won't damage your credit record because they don't involve any form of credit.



In answer to the original question, yes, they're helpful in sticking to a budget in the sense that you can only spend what you load on.

As for whether they are expensive, yes, they can be. Most charge a fee to get of about £10, and either a transaction fee typically about 3%, or a monthly fee, typically £5 or so.

Some charge to load them up, some charge to withdraw cash, most charge for ATM withdrawals and none of them (as far as I know) are protected by the government if the bank goes bust ion the way that current accounts, for example, are. So don't put too much in one.

But they vary. They charge in different ways, and some charge more than others, and some suit different usage patterns. It really depends on what you want it for, and whether the benefit you'll get justifies what it'll cost you.

[petrefax]

Pre Pay?

Credit?

lmao....
is that what they're called?

That's gotta be a trading standard issue for starters, no?

A credit card is where you use it BEFORE paying for the items yourself.. hence CREDIT

spoken like a true salesman

[arthurleung]

Wonder if there is one that is trustworthy and have low foreign transaction fee? Sick of my Halifax card(s) charging almost 3% out of my JPY purchases.

Nationwide refuse to give me a debit card and my "income" is not high enough for a non-student credit card.

[Allen]

Pre Pay?

Credit?

lmao....
is that what they're called?

That's gotta be a trading standard issue for starters, no?

A credit card is where you use it BEFORE paying for the items yourself.. hence CREDIT

Meh, you know what I mean!

I dunno what they're called, prepaid payment cards I guess?

[Allen]

Thanks for the replies. I've decided to go for a 2nd bank account without any possibility of going overdrawn and incuring charges etc. Have gone with the Natwest Step account. If it's any good, I'll transfer from Barclays. Fed up with their reserve system and it's £22/week charge if you go into it.

[TooNice]

Nationwide refuse to give me a debit card and my "income" is not high enough for a non-student credit card.

Isn't the Post Office credit also pretty good for foreign purchase?

[shakerist]

i got the o2 one , to get the o2 one u have to be a customer (top up 10 pounds every 3 months at least) the problem is which annoys me i cant register it with paypal or ebay :@ but otherwise ye they are gr8

[Zak33]

i got the o2 one , to get the o2 one u have to be a customer (top up 10 pounds every 3 months at least) the problem is which annoys me i cant register it with paypal or ebay :@

thats becasue ebay want access to your money and your overdraft and they want it forever.. so if you pull your money out of ebay and they decide they want it back for a refnd for someone, they just take it... even if you're over drawn.

they cant do that with a pre pay card.. so they won't deal with them.

paypal... = devil's spawn