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Compare prepaid cards in India
Learn more about prepaid debit and credit cards and choosing the right one for you.
Prepaid cards are reloadable cards (similar to a debit card) you can use to make purchases wherever credit or debit cards are accepted. As you’re not borrowing any money or linking it to a current account, there are no credit checks when applying for a prepaid card. And your credit score won’t be affected when you use it. In fact, you’ll have most of the same conveniences that using a major credit or debit card offers without building up interest.
This guide explains how prepaid cards work and the common fees you can expect. Discover the pros and cons of using a prepaid card and decide whether a prepaid debit or credit card is right for you by comparing products side by side.
Prepaid card offers in India
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Are prepaid cards the same as debit and credit cards?
Prepaid cards can be swiped for purchases just like a debit or credit card, but there’s no balance to repay and the card doesn’t affect your credit score. In order to use a prepaid card, you need to load money onto it. This differs from a credit card which allows you to spend up to a set credit limit, and a debit card which lets you spend what’s in your linked current account. Prepaid cards are slightly different but are a great alternative to credit cards or current accounts.
Most prepaid cards will not allow you to spend more than you have available, so you won’t get hit with expensive overdraft fees or interest.
We’ve put together a helpful table to show you how prepaid credit cards differ from debit and credit cards:
|Prepaid debit card||Debit card||Credit card|
|Uses funds in real-time|
|Accepts direct deposits|
|Helps you build your credit|
|Can open with no credit or bad credit||Sometimes||Sometimes – look at cards for bad credit|
How does a prepaid card work?
Prepaid cards combine the best features of credit cards and debit cards and offer a safe alternative to cash. Here’s a brief overview of how prepaid cards work.
- Apply for the card. You can apply for a prepaid card at the bank or order the card online. You will have to complete the KYC process to obtain the card. The bank may require that you verify your details as well.
- Load the card with money. Most cards offer a variety of options for loading funds onto your card. You may be able to transfer funds from another account or have a certain amount directly deposited onto your card at regular intervals.
- Make purchases anywhere you’d use a credit or debit card. Making purchases with a prepaid card is as simple as using any other payment card. Swipe your card at the register or enter your card information for online purchases. Some prepaid cards even let you pay bills online, transfer funds to another person or withdraw cash at an ATM.
- Reload the card once you’ve spent the balance. Each purchase reduces the balance available on your card. Once you’ve spent all the funds you originally loaded onto the card, you’ll have to reload it with more money. You don’t have to wait until your card is empty to reload, but your card may be subject to a maximum load amount.
Prepaid cards are available for both the business and the individual. Businesses usually use prepaid cards to give out commissions, incentives, bonuses and meal cards. On the other hand, individuals can use prepaid cards in the form of gift cards for our friends and family, instead of gifting them hard cash.
What prepaid cards can I get in India?
We’ve listed some of the prepaid cards available in India below along with some of the features:
Axis Bank Smart Pay Card
The Axis Bank Smart Pay Card is a rupee denominated prepaid card.
- No account needed. You don’t need an account with Axis Bank to apply for a Smart Pay Card.
- Zero cost liability insurance.> It comes with zero lost card liability insurance.
HDFC Bank ForexPlus Card
The HFC Bank Forex Plus Card can be used to withdraw cash or make online payments while travelling.
- You can use the card while traveling. The card can be loaded in various currencies like Australian Dollar, Japanese Yen, Canadian Dollar, Singapore Dollar, and so on.
- Reloadable cards. You can top up the card at any time via net banking or phone banking.
SBI Prepaid Cards
The SBI Prepaid Card can be used to make online purchases and cash withdrawals.
- No existing bank account required. You can avail an SBI Prepaid Card even if you don’t have a bank account.
- Different cards for different purposes. There are three types of cards, each with its own perks.
ICICI Bank Prepaid Cards
ICICI Bank Prepaid Cards can be used for a wide range of purposes like travelling, gifting and business.
- Offers a virtual card option. ICICI Bank offers a virtual prepaid card that can be used to make online purchases.
- Reloadable cards. Depending on the type of prepaid card, it can be recharged by yourself or your employer.
When looking for a prepaid card, shop around and compare your options.
What are the benefits of using a prepaid card?
Prepaid cards offer several potential benefits for consumers:
- Bad or no credit is accepted. If you’re a consumer with bad credit or no credit history, or you simply want to avoid another hard search on your credit report, you won’t have to worry about that with a prepaid card. Since you’re not applying for a line of credit, there’s no need for a credit check, and having a new card won’t impact your credit score. You can get a prepaid card regardless of your credit history.
- No bank account necessary. A prepaid card is a viable alternative for these consumers. With a prepaid card, you’ll get many of the same features as a current account – some even have cheque writing privileges – but having a bad current account on your record won’t keep you from getting a card.
- No overdraft fees. Banks charge overdraft fees whenever you make a purchase that exceeds the balance in your current account. These expensive fees can drain your bank account and leave you with a negative balance. With a prepaid card, you can’t spend more than you have available, which means you won’t face overdraft fees. Some people opt for a prepaid card even when they’re able to get a current account, simply to avoid overdraft fees.
- Can also function as a travel card. Some prepaid cards can be loaded in different currencies and used around the world while traveling. They can be used to make purchases in the local currency and withdraw money from local ATMs.
- You’ll pay no interest. Because you can’t carry a balance on the card, you won’t be subject to expensive interest charges as you would be with a credit card.
- You won’t go into debt. Credit and debit cards both carry the potential for getting into debt. You create debt the instant you use a credit card because you have to repay the purchases you’ve made. Debit cards won’t automatically create debt, but if you go into the overdraft of your account, you’ve created debt. Prepaid cards eliminate this risk.
- You don’t have to put all your funds at risk. You can load a prepaid card with a limited amount of funds and use the card for a specific purpose. For example, you might use a prepaid card when you’re travelling internationally so your current account or credit card is not at risk of fraud or theft.
- You can build good spending habits with less risk. Young adults or parents of teenagers may consider a prepaid card as “practice” for using a traditional credit card before graduating to the real thing. Using a prepaid card can instil discipline and good spending and payment habits that will prevent future financial problems.
What fees apply to a prepaid card?
Here are some of the most common fees you’ll find with prepaid cards:
- Card issuance fee. Many prepaid cards charge an initial fee, particularly if you purchase the card from a retail location. Some cards are free when you order online.
- Annual fee. Most prepaid cards charge an annual fee simply for having the card. You may be able to have the fee waived if you meet certain criteria, such as making a minimum number of transactions on the card or having a direct deposit set up for your card.
- Reload fee. Each time you add money to your prepaid card, you may be charged. You’ll typically have to pay a fee when you add cash to your prepaid card. However, electronic deposits and direct deposits may be free.
- ATM fee. Withdrawing money from an ATM comes at a cost. You may face an ATM fee from your card issuer in addition to the ATM owner.
- Transaction fee. A small fee is charged to the card every time a transaction is made. The fee may be waived if you meet certain criteria, such as completing a minimum number of transactions per month.
- Card-to-card transfer fee. When you transfer money from one prepaid card to another, a small fee may be charged to the card.
- Card replacement fee. If your card is stolen or damaged, you may be charged a small fee for a replacement.
There may be other fees associated with prepaid cards so check the details carefully when comparing your options.
How do I compare prepaid credit and debit cards?
Choosing a card in-store at the register may not give you time to digest all of the fine print. However, shopping online for a prepaid card will give you a good opportunity to take your time to check out the fees and terms of each card. While the terms may be confusing, it’s important to read through them so you understand what charges you’ll potentially face with the card and how you can avoid as many fees as possible.
Once you’ve chosen a card, you may still be able to pick it up in-store, after you’ve confirmed it’s the right choice. Here are some factors to consider when you’re comparing prepaid cards:
- Features. Some prepaid cards come with the same basic features offered by current accounts. For example, you may be able to use online bill pay, mobile check deposit or direct deposit. As you compare prepaid cards, see how the features stack up against each other to choose the one that will best fit your needs.
- Cost. Prepaid cards are notorious for high fees. You’ll probably have a hard time finding a card that doesn’t charge any fees, but look for one that will allow you to avoid at least some of the fees or have them waived.
- Ease of loading. For the card to be functional, you need to be able to reload it when you need to. For example, if you prefer online banking rather than dealing with cash, a prepaid card that allows bank transfer top-ups would be best, ideally if the feature is free. If you prefer to deal in cash, look for a prepaid card with convenient cash reloading options and lower fees.
- Ease of making withdrawals. Prepaid cards typically come with the ability to withdraw cash from an ATM, but this isn’t a free service and can come with quite an expense for the privilege. Look for a prepaid card with a large network of ATMs to increase the range of withdrawal options available to you. But pay close attention to the fees you’ll pay for ATM withdrawals.
Prepaid travel cards
Prepaid travel cards allow you to load and spend money in the local currency. Just like with any other prepaid credit card, a prepaid travel card only allows you to spend however much you have already loaded onto the card. You can keep track of your balance online or by calling the number on the back of the card. Certain merchants can also tell you the balance on your card, but not all can, so it’s always a good idea to know the balance before attempting to make a purchase. Prepaid travel cards can be used in stores, online, and ATMs. Funds are deducted immediately or will appear as a pending charge.Back to top
What should I watch out for with a prepaid card?
As with any financial product, it’s important to use prepaid cards wisely. There are some potential pitfalls to watch out for.
- No ability to build credit. While it’s a plus that you can get a prepaid card without going through a credit check, it’s also a drawback that the card won’t help you rebuild a bad credit score. Since prepaid cards aren’t a credit card – you’re not demonstrating an ability to borrow and repay responsibly – they won’t help your credit score.
- High fees. Some prepaid cards have complex fee structures. When you’re shopping for a prepaid card, look for one that will allow you to minimise the fees you pay or have them waived. Otherwise, you could end up having your funds allocated to unnecessary fees that you could avoid by choosing a different prepaid card.
- Reload limits. Watch out for cards that limit the amount you can load onto the card. Your card may have several different load limits. For example, there may be a limit on daily cash reloads, daily direct deposit loads and a total limit on the amount you can have loaded onto your card at any time.
- Withdrawal and spend limits. Many prepaid cards limit the amount you can withdraw from an ATM or bank branch in a single day. A card may also have a daily spend limit. Examine the limits for the cards you’re considering and make sure these fit with your regular spending habits.
- Declined charges. While you won’t face overdraft fees for transactions that would put your account in the negative, your card will be declined for transactions that exceed the amount available on your card. To avoid embarrassment at the checkout, check your balance to confirm you have enough funds to cover your transaction before you swipe.
- Some merchants may not accept prepaid cards. Some hotels and car rental agencies do not accept prepaid cards. Others may require a credit check or additional documentation before allowing you to use a prepaid card. You may have to pay a higher deposit, which will leave a portion of your funds unavailable until the transaction is complete.
- Cards without fraud protection. Current accounts, debit cards and credit cards all come with protection from fraudulent transactions. Unfortunately, prepaid cards don’t always have the same protection. That means you can’t get your money back if someone were to steal your card and drain your funds. You also may not have protection for damaged online orders or billing errors. Look for a prepaid card that does have fraud protection so you know your money is safe from fraudulent or unauthorised transactions.
Is a prepaid card right for me?
Prepaid credit cards can be a good choice for people with bad credit who are struggling to get approved for a credit card or traditional current account. There may be other consumers that might also benefit from one. Some consumers even choose to use a prepaid card in addition to a debit or credit card. A prepaid card could be right for you if any of these apply:
- You have bad or no credit. You can get a prepaid credit card without a credit check, so it can be a good option if you don’t qualify for a traditional bank account or credit card. They won’t help you improve your credit score but will give you a way to pay bills and make purchases online.
- You don’t want to pay current account or overdraft fees. Many current accounts charge a monthly fee that can be waived only if you meet certain criteria. You may be able to lower your monthly bank fees and avoid overdraft fees by switching to a prepaid card.
- You want to control your spending. Most prepaid cards won’t let you go over your prepaid card balance. Knowing that you can only spend what’s available on your card can force you to keep your spending under control. You can also use a prepaid card to manage different aspects of your budget by loading only what you’ve allocated for that expense.
- You want to encourage your child to learn how to spend money responsibly. A prepaid card can help your teenager get used to spending electronically without the risk of getting into financial trouble. You can monitor their spending and load their card with additional funds as needed.
- You want security while spending overseas. If you’re travelling overseas to a place that’s known for debit or credit card fraud, a prepaid credit card can be a good way to protect your accounts from potentially harmful activity.
Prepaid cards combine flexibility and affordability by allowing you to load and spend your own money. In Ireland, prepaid credit cards often come with varying features and prices, so you should always compare your options before deciding on one.
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