Menu
Top up online within 30 seconds
Receive top up voucher directly by email
Secure and reliable checkout
21/04/2020 - 

Prepaid Credit Cards: Everything You Need to Know

A prepaid credit card may sound like a strange concept, but there’s a reason they exist. Prepaid credit cards are all about flexibility. They give you freedom and privacy online. But there are so many types that choice can be overwhelming.

That’s why we’re here. Read on to find everything you need to know about prepaid credit cards. In the end, you’ll be able to choose the right one for you.

alt
First, a small clarification

If you’ve done a bit of research on prepaid payment methods, you may be understandably confused. There are so many terms out there, such as ‘secured credit card’, ‘online credit card’, ‘prepaid credit card’, or even ‘cash voucher’ or ‘prepaid money’. There are some differences between all these products, but the underlying principle is the same.

For the sake of clarity, we’ll only use the term prepaid credit cards from now on.

So, what are prepaid credit cards?

The concept of a prepaid credit card is simple. Some can be used (almost) exactly as a regular credit card. Others can be used on specific websites that accept them as a payment method. In either case, though, the funds that are in your prepaid card need to be preloaded. So, you’re not spending money you don’t have.

It’s not much different than a pay-as-you-go mobile phone. You can top it up with as much money as you like and use that credit until it runs out. No monthly contracts or unexpected bills.

Do you need to apply for a prepaid credit card?

If we have to pick the most annoying thing about regular credit cards, it would have to be the application process. So, is there one for prepaid credit cards as well?

That depends.

If you prefer to have a physical prepaid credit card, you’d probably be getting one from a bank. And banks being banks, they might ask you to go through an application process similar to the one for regular credit cards. There is, of course, a major difference between these two processes in that the approval rate for prepaid card applications is high. No surprise, as there’s essentially no risk for the lender. Since you’re pre-loading the full amount you could spend, banks have no reason to reject you.

Even so, an application process means an extra step and a delay. If you want to use your card right here, right now, you might be better off going for a provider that isn’t a bank. In most cases, these types of providers offer online prepaid credit cards or prepaid codes.

Examples of non-bank-issued prepaid cards are CASHlib, Ticket Premium and Neosurf. They come in the form of a code, rather than a card. You could pay cash for them and get them from a physical location. However, if you like things to be a bit quicker, you could get them immediately online, using PayPal or a debit card to buy them. In a few clicks, you’ll have your code in your email and you can pay with it on hundreds of websites. No application process, no delay.

Who needs a prepaid credit card?

Because of the flexibility they offer, prepaid credit cards can be a smart payment option for anyone. However, they’re especially suitable in these cases:

  • You don’t have a bank account. Or you don’t want to share it.


Unlike a credit card, which is linked to your bank account, a prepaid credit card doesn’t even require you to have a bank account. That’s handy if you, in fact, don’t have one. Some prepaid cards could actually serve as a bank account which you top up with cash. In that case, you won’t ever need to deal with banks unless you want to.

What if you do have a bank account, but you’re worried about safety and privacy? When you’re leaving your bank details everywhere online, you’re only a breach away from lots of hassle. And data breaches happen more often than you think. That’s not a reason to panic, but it’s a good reason to be cautious with your payment data online.

Paying with a prepaid card minimises the risk of your personal or banking details being misused. For example, if you use a prepaid payment method such as CASHlib or Neosurf when paying online, you won’t have to provide your personal or payment details during the purchase process.

  • You want more spending control: for you or your kids


Another situation when a prepaid credit card can be a great alternative to its regular version is when you want to eliminate any possibility of overspending. Anyone who has ever bought one pair of shoes too many, knows that your spending power seems tremendously different on the day after a sale than it does when you’re trying on the perfect shoe.

Prepaid credit cards are really a game-changer for shopaholics who strive for moderation. When the funds you have preloaded are finished, so is your shopping spree. At least until you add more money to your card.

This feature of prepaid cards is what makes them a great way of helping your children spend responsibly. For example, if your teenagers are developing a love of gaming, you can support it and keep it in check by giving them a CASHlib preloaded with their gaming allowance. Easy for you to arrange. Impossible for them to overspend.

  • You’re unable to get a regular credit card


Usually, when you apply for a regular credit card, the bank goes through your credit file and uses information from various credit reference agencies in order to evaluate your risk level as a borrower. So, if you have unpaid loans, or a history of delayed or missed credit card debt repayments, your chances of a successful application might be low.

Getting a prepaid credit card doesn’t depend on your previous credit history because you will need to prepay the amount that’ll be on the card.

This being said, you may have a great credit history, but just don’t want to take on any credit. A prepaid credit card would be an alternative for you in this case. You’d get shopping freedom without any loans involved.

alt
  • You want to spend money online discreetly


Imagine you have a shared bank account with your spouse, but would like to have some privacy about where you spend your money. Whether it’s the guilty pleasure of online gaming, or you love going on the occasional luck-based entertainment spree, it’s your thing. You don’t have to have everyone know about it. A prepaid credit card would keep your spouse off your back.

If privacy online is your main driver to look for a prepaid card, you might want to consider prepaid payment methods that aren’t credit cards. For example, CASHlib, Ticket Premium or Neosurf. They are forms of e-money and can be used directly as a payment method on all major gaming, dating and luck-based entertainment websites. If your favourite website accepts them as payment, you don’t need to look any further for an alternative solution. All you need to do is buy a CASHlib voucher, Ticket Premium or Neosurf code and you’re good to go.

Things to keep in mind about using prepaid credit cards

Hands down, prepaid credit cards are the definition of freedom when it comes to your spending and privacy online. However, there are some things you should be aware of when using one. For example:

  • Unexpected fees.


Depending on your card provider, there may be costs involved in using it. For example, an annual membership fee or a top-up fee. If there is a top-up fee, it may be charged per transaction or as a percentage of your top-up amount.

Essentially, the best way to avoid unnecessary fees is to pick the right prepaid solution provider - e.g. these prepaid payment methods are for single use only, so there are no membership or recurring transaction fees to worry about.

Whichever provider you pick, make sure to check their terms of use beforehand.

  • Purchase protection.


A regular credit card offers purchase protection for items over 100 GBP. What it basically means is that your credit provider has the same responsibility as the retailer when a purchase goes wrong. So, for example, if you order a product from a dodgy merchant online and you never receive it, you can call your credit card company or your bank and get your money back. Not bad!

However, since prepaid cards don’t involve borrowing money, they also don't offer purchase protection.

Is this something you should worry about? Not necessarily. Some prepaid credit card providers do offer some form of purchase protection. That’s why it’s important to check the provider’s terms to understand what they offer and how it’s enforced.

So, which prepaid credit card is right for you?

Now that you know what prepaid credit cards are and what they could mean for you, you can make the right choice for yourself. Remember that a prepaid credit card is a great tool if you don’t have a bank account, want to use cash for online payments, or you want to limit your spending.

However, start your search for a prepaid credit card with your priorities in mind, because other prepaid payment methods might fit your needs better and be a quicker solution.

If you’re looking for data privacy or want to use products and services online discreetly, prepaid payment methods such as CASHlib, Ticket Premium or Neosurf might be the simplest choice for you. Buy them in seconds, use the digital code to pay on your favourite website, and you’re done.

Whatever the choice you make, prepaid payment methods are fast, safe and simple. Just how we like it.

Check out our assortment of prepaid credit cards.


Go back