Prepaid cards or Prepaid Debit Cards, as they are also called, are likely to be one of the hottest selling gift items this Christmas. Whether it is a prepaid card for yourself or one which you gift someone else, there are a number of things you can do to make the most of your prepaid card.

Prepaid Credit Cards are Hot. Here’s Why

The numerous reasons for the growing popularity of prepaid cards are rather obvious and can be summarised as follows

  • Ease of Availability – Prepaid cards are available to everyone and there are no credit checks or bank accounts required. Confirm your ID and address and you pretty much have a prepaid card. Furthermore, with over a 100 prepaid cards in the market, you are more than likely to find one that suits your needs.
  • Reduced Exposure to Fraud – The recession has fuelled an increase in online theft and ID fraud. With a prepaid card, your fraud liability is limited to the amount that is available on the card unlike with your bank cards. Hence, reduced exposure to fraud is key
  • Ability to Budget and Control your Spending – With prepaid cards, you can only spend what is on the card as there is no overdraft facility. So you can control your spending and ensure that you stay within budget.
  • The Extra’s – Where do we start: Discounts, Cashback, free rewards, competitions, purchase protection, SMS account management, membership of discount clubs and free cards – just a few of the numerous extras that prepaid card providers have started to offer which ensure that your prepaid credit card becomes cost neutral to run allowing you save more than the fees associated with the card.
  • Global Acceptance – Be it MasterCard, Visa or Maestro – whatever the badge, your prepaid card can be used at millions of retailers across the globe. MasterCard is the most popular because it has the largest network worldwide with over 28.5million locations that accept the MasterCard brand.

What about the Fees

The lack of marketing drive, confused or half baked consumer messages and the media, to some extent, have helped create the perception that prepaid cards have lots of fees attached to them and are expensive to use.

Whilst it is true that most prepaid cards would have some sort of fees attached to them, in most cases, these fees can be compensated by the overall savings and security that a prepaid card delivers.

Furthermore, in most cases, you will find that you can save on these fees by taking a few tips on board with regards to purchasing, topping up and using your prepaid card.

Prepaid Debit Cards: Tips to make your cards Fee Free

  • Card Application Fees – There are a number of free cards in the market and you may be able to find a free card that suits your needs. However, card fees are a one-off fee cards are typically valid for 2-3 years. So it is arguably more important to find a card which gives you the best long term benefits as opposed to one that is simply free to start with.
  • Card Application Method – Some cards charge an extra amount when bought via SMS or offline. Online applications tend to be the cheapest.
  • Activation Fees and Loading Fees – Read your cards terms and conditions carefully and choose the cheapest activation method possible and the loading method which is free.
  • Retail POS Fees – Almost all the prepaid card providers now provide free local purchase.  Make sure your card is one of those cards.
  • ATM Withdrawal Fees – ATM withdrawals fees are steep. Try not to use your prepaid credit card for ATM withdrawals unless it is absolutely necessary.
  • Card Tariffs – Some cards have a monthly fee but free transactions and others have no monthly fee but charge a transaction fee. Choose the card tariff and card which works best for your spending patterns.
  • Card Currency –Depending on your planned usage, find a card that matches the currency of your destination location. USD for the US, GBP for Britain, EURO for the euro zone.
  • Extra Savings – Find a card that gives you lots of discounts or discount vouchers, or has some sort of cash back built in as this will help you overcome most of the fees that you may incur on your card usage making your card a fee free payment option.
  • Administration Charges – View your card statements online, use the Internet to make all customer queries, avoid premium phone numbers and speak to customer services only when absolutely necessary. What that all really means is extremely low or zero administration fees on your card usage.

The fact is that you are unlikely to make your card a 100% fee free option but you can negate most of the fees associated, through smart usage and the extras that are available on the account through savings.

As with all quality services, where we expect to pay a fee, prepaid card providers do also charge a fee but given all the wonderful benefits of prepaid cards and all the tangible and intangible savings that a prepaid card provides, it is a small price to pay indeed.

Other than that, as the recession has proved, the services that were “free” were not really free and we will continue to pay the price for those “free” services for some time yet.

Visit Prepaid365 to find out more about Prepaid Cards and their Benefits and read about our award winning prepaid gift card.