prepaid cards - benefits? realistically what is the point?

Maestro.

as above, I've never really understood. Just seems like a "charged up" debit card to me that is trying to be a credit card but without any of the benefits like S75.

I have been lead to believe that they can be good for credit history as they appear as a satisfied loan after a year?

other than that, would there really be any point as I already have a MasterCard debit card from my bank.

Plxply

There are none as far as I can tell, the only card (that I know of) that offers any credit building is the Freedom Prepaid Card. You pay them £6.95 per month for a year(?) and it is reported as paying a loan. Normal prepaid cards don't report to CRA's and you don't get back your monthly fee.

Some people believe they are safer as they mean that your card details aren't transmitted and only the balance in your prepaid account is vulnerable but you get very good protection against fraud with a debit card anyway.

bengalknights

Its really aimed at school kids etc who dont have access to mainstream debit cards.

Plxply

bengalknights wrote: »

Its really aimed at school kids etc who dont have access to mainstream debit cards.

If you're 11 or older you're able to get a Visa Debit card from a majority of banks and couple that with internet banking you practically have a full account (minus overdraft). It really does puzzle me as to why people use these cards.

NinjaPenguin

I had one of these a few years ago after my bank shut my account. I got paid in cash & paid for everything in cash so I never really bothered about it until I wanted to buy something online. I got an O2 money prepay card (no longer exists) to tide me over until I could set up a new bank account. Without it I would never have been able to buy anything online.

Ever since I opened I new bank account, I never had the need for it again.

I_luv_cats

A bank debit card has access to your whole current account and while you argue the toss with your bank about any un-authorised payments (fraud / continuous payments authority etc.) you could be left without any money.

I'd rather use my pre-paid where I have control and safety.(against my bank account being emptied!!!)

Until you have known people that have been scammed and had a fight with their bank, carry on and dismiss these pre-paid cards!!

Gromitt

If you don't want your account emptied then use another card or a credit card. I have a current account dedicated to when I want to use a debit card for a purchase (eg. holidays). Transfer money to it before you walk out the door.

For anything that doesn't charge a fee for using a CC, use that and collect cash back.

mellonicoley

According to this, the Cashplus Creditbuilder card offers section 75 protection. http://www.moneysavingexpert.com/cards/prepaid-cards

giblet10

I got one from Cashplus during my IVA as you can use them to hire cars (must be agreed in advance with CP) - that was when most car hire companies treat me like a leopar if I rocked up with my debit card only..not sure what it's like now as I have a credit card again..

AmitSharma

There are additional benefits like prepaid travel cards give better exchange rates than the high street and if folks don't have a bank account and perhaps no credit/debit card, it does give them access to online electronic purchases otherwise they would miss out on ryanair, easyjet, amazon, etc etc

Not forget the risk averse amongst us - prepaid cards can be useful for staying anonymous online and keeping your id safe.

Last but not the least - online ID theft is rising with the recession and fraud is actually higher - paypal usage is increasing and so is prepaid card usage becuase people do not want to use a card linked to their bank account and their savings.

Ciao

mikesten

Plxply wrote: »

There are none as far as I can tell, the only card (that I know of) that offers any credit building is the Freedom Prepaid Card. You pay them £6.95 per month for a year(?) and it is reported as paying a loan. Normal prepaid cards don't report to CRA's and you don't get back your monthly fee.

Some people believe they are safer as they mean that your card details aren't transmitted and only the balance in your prepaid account is vulnerable but you get very good protection against fraud with a debit card anyway.

Cashplus have been doing Creditbuilder for a couple of years now, and I believe BlueSky also do it.