Introduction

Prepaid Credit Cards

Your guide to all Prepaid Cards

Prepaid Cards are suitable for those with any type of credit rating and are useful in times when you need a debit card when you don't have a bank account.

Prepaid Card info

Prepaid cards mean pre-tax profits: How do prepaid card companies make their money?

It is understood that there are some prepaid cards which are profiteering on the credit crunch. As more consumers suffer from bad credit, the number of people who are applying for prepaid cards is understood to be higher than ever before.

Unsurprisingly, the companies that supply prepaid cards or credit card bad credit are businesses and profit has to come into the equation somewhere. However, some finance experts are accusing services of giving consumers sneaky surcharges which are beginning to add considerable figures to bank accounts.

Some of the more premium prepaid cards, which are suffering in the recession as cheaper alternatives become more viable for cash-strapped Brits, involve monthly charges. Such charges, which are debited from a prepaid card’s balance on a billing cycle, are rare in prepaid credit cards now because of new competition.

As a lack of a fee in one place can result in an unexpected fee elsewhere, it is important to take everything into consideration before making a move. Some prepaid card companies add service fees to the features of a card which are used most, which usually include topping up, withdrawing cash from a cash machine and purchasing goods. Even though the percentages of fees can seem small on paper, 3% in the majority of instances, frequent card use can make all of these charges add up over time and can reduce how far your money goes.

Even though you may instinctively look for the prepaid card which costs the least amount of money to purchase, spending a few pounds more to buy a prepaid card than opting for a cheaper alternative can save you money in the long run.

It is not unusual for a small fee to be deducted from the money you top up. The amount of money which goes to the prepaid card company can vary on the method of payment you choose, so looking on your service’s website in advance to find out more about different top up methods can be beneficial.

In this recession, it can be fair to say that one market sector that isn’t being affected too much is the prepaid card industry. It can seem that they are gaining money from people who are losing money – but some prepaid card companies have put up a defence and claimed that they are not a charity. Without their services, the opportunity for many consumers to have credit would be diminished, so it could be worth considering how valuable the service you pay for is to you.

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