Frequently Asked Questions.

I have bad credit- Will I be approved?
Yes! Prepaid cards may look and feel like debit or credit cards, however, they are not. No “credit” is being advanced, and you are not required to sign a credit agreement. After all, it’s your own money being paid into the pre-paid account. You do not have to pass a credit check, so people with current or previous bad credit or CCJ ‘s are still approved for a prepaid card. Your identity and address are still verified during the application process, but you will not get declined for bad credit.

Do Prepaid credit cards improve my credit rating?
Whilst prepaid credit cards can be a very useful product for those with a good credit rating, many card providers target their prepaid products at those with bad or no credit history. With the number of IVA’s and bankruptcy cases on the increase, there is a growing population in the UK that are unable to get a traditional credit or debit card, without paying extremely high fees. However, given you are loading your own money onto your prepaid card, and the card issuer is not lending you money, so information relating to your prepaid account will not be exchanged with the credit bureaus. So, whilst you may maintain a healthy balance and operate your account within the card provider’s terms and conditions, this good history will not improve your credit rating.

Can I Use Prepaid Cards on Paypal and Ebay?
Yes! If you don’t have a debit or credit card, or simply just don’t want to use your bank account or credit card details online, prepaid cards provide a great solution. You can use your prepaid card to register on paypal and start sending money or shopping on ebay immediately.

Can I use a prepaid card to hire a car?
If you plan to use your prepaid card to hire a car whilst on holiday, or even within the UK, you need to proceed with care! Many UK prepaid card issuers have “transaction usage restrictions” outlined within their terms and conditions. Admittedly, these are intended to protect both the card issuer, and customer, however, if you are unaware, it could result in your card being declined whilst trying to hire a car. This is all caused as a result of the way in which car hire organisations operate. When you hire a car, an initial authorisation is made on your card. This “holds” or reserves funds within your prepaid account, and deducts your available credit so you can’t spend those funds. Once you return the hire car, your prepaid account is billed with the agreed hire amount, plus any additional fees. For example, if you have damaged the car, or it requires fuel, or perhaps you even extended the hire for a few extra days, additional fees may be incurred, depending on your hire agreement. The car hire company will charge these fees to your prepaid card, even if this results in the prepaid card going overdrawn. Clearly this causes problems, as the prepaid card issuer is not protected in this scenario, and is unable to chargeback the transaction to the hire company. Therefore, if the card issuer is unable to retrieve any additional fees from their customer, they are unable to recover the funds and take the financial loss. Exactly the same situation occurs on a credit card, however, generally any additional charges still fall within a customers agreed credit limit. So, for this reason, prepaid issuers generally restrict and do not allow a card to be used for car hire.

Are prepaid cards the same as credit or debit cards?
Yes! Prepaid cards work just like a normal debit or credit card, with the exception that all transactions are approved and authorised by the prepaid card provider. So, unlike a debit or credit card, where you could go over you credit limit or overdraft, you are restricted and only able to spend funds that you have available in your prepaid account. It’s much like a pay as you go mobile phone, where if you run out of credit, you can no longer make calls! Once you have run out of credit in your prepaid account, you need to top-up before you can continue using it.

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Have A Look At Some Of The Following:

• Available UK Prepaid credit cards.
• What are prepaid credit cards?
• Qualifying for a prepaid credit card.
• Benefits of a prepaid credit card.
• Reloading your prepaid card.
• Transferring money abroad.
• Travel money.