Read on to find out more about prepaid cards, and whether they could be a good budgeting option for you.
A prepaid card can be a good alternative to carrying cash around, or using a debit or credit card. Sometimes referred to as ‘everyday cards’, you can load up a prepaid card with cash and just top them up like a pay-as-you-go mobile.
Prepaid cards can be useful for budgeting, a good first card for teenagers, or for people who just don’t use a bank account.
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How do prepaid cards work?
When you buy a prepaid card you can decide how much money to put on it straight away. There’s usually a few limitations (such as an overall maximum, and a maximum amount you can withdraw in one go). Just think of a prepaid card as a card for day-to-day spending, the same as having cash in your wallet.
Topping up works in a number of ways. A lot of cards allow you to top up at places such as the Post Office, so you can go in and simply add however much cash to your card. (This may take a few days to be processed).
All prepaid cards are linked to your main bank account or building society. Many prepaid cards let you top up online or via an app. The Monzo card for instance allows you to manage your account, the cards linked to it, and other features such as you PIN number and your spending history all from the app.
Do prepaid cards cost much?
Fees and charges varies. Some prepaid cards come with absolutely zero fees for setting up or having them open.
In other cases, you can be charged for getting the card in the first place. Some cards also have monthly management fees. Similarly some charge withdrawals. Some charge you for paying for goods.
These fees can quickly add up so make sure you shop around and find the right card for you.