Prepaying a credit card.

jones_guitar

Hi, I am on a tight budget and instead of having two separate spending and bill accounts, I was thinking of crediting a card. I read bad reviews about prepaid MasterCards.

What credit card is best for preloading? (if any?)

The other option is, I could open a separated bank account with a different bank.

YorkshireBoy

cjonesguitar wrote: »

Hi, I am on a tight budget and instead of having two separate spending and bill accounts, I was thinking of crediting a card. I read bad reviews about prepaid MasterCards.

What credit card is best for preloading? (if any?)

One that doesn't expressly forbid it in the T&Cs...many (most/all?) do.

The other option is, I could open a separated bank account with a different bank.

That would be the best move, especially with a tight budget (and possible temptation with the credit card!).

Spivved1987

I used to do this on a supermarket store card - load it after I got paid then spend against it. Half way through month 3 they sent me a cheque for the balance on the card, and told me off. Something to do with money-laundering regs apparently.

Ben8282

Pre-loading a credit card is not advised and is a pointless exercise. Just keep your money in the bank and set up a full balance direct debit.

Spivved1987

Ben8282 wrote: »

Pre-loading a credit card is not advised and is a pointless exercise. Just keep your money in the bank and set up a full balance direct debit.

Hiving off your regular items (eg in my case petrol,food shop, car repairs, road tax, holidays for example) is a useful way of budgeting. Once they're gone from your current account there is no temptation to spend the money. Also it helps to even out cash flow fluctuations - I know that for 11 months out of 12 the food fund will be in surplus, but when Christmas hits me like a train I know I will have enough to cover it.

Pre-loading credit cards is not the way to do it, as we've seen. I have mine in one instant access savings account which I can recall pretty much instantly via Fast Payments (Virgin since you ask). I also maintain a decent set of accounts on my computer so I know the balance on each fund. I buy petrol, foodshop etc on credit cards then repay from the funds before I get charged interest.

It works for me, but it is necessary for the sum of the funds to be in credit, even if some of the individual funds are in debit temporarily. Requires a lot of discipline, and the ability when necessary to temporarily put money into the funds on a temporary basis when the sum of the funds goes into debit.

But then I'm a boring accountant!