WHAT IS A PREPAID CARD?
Prepaid cards are an alternative to cash and do not necessitate the opening of a bank account. The following article will give answer for question “What Is A Prepaid Card”.
1. What Is A Prepaid Card?
Prepaid cards, often known as daily cards, are an alternative to carrying cash. They’re perfect if you don’t have a bank account but want the security of cashless transactions.
Dissimilar to a debit or credit card, you top them up as needed, which can aid with budgeting.
2. The Operating Method of A Prepaid Card
When you buy a prepaid card, you load it with money and then top it up when it runs out, exactly like a pay-as-you-go phone. You cannot incur debt on it, unlike a credit card, and you will not be subjected to a credit check when you apply.
As a result, you may carry as many prepaid cards as you like in your wallet. Remember that they have varying balance restrictions, and how you top up might effect that limit, so make sure you understand the terms and conditions beforehand.
3. Ways To Top Up Card
Prepaid cards can be loaded in a variety of ways, including:
- – Online: You may top up your prepaid card by logging in to your account on your card provider’s website or app and using your credit or debit one to do so.
- – Bank transfers: From your bank account, you can send a bank transfer to your credit card. Your prepaid card issuer should be able to offer you with the sort code, account number, and reference you require.
– Payment in cash: You may deposit cash into your account at select banks, the post office, or any business or gas station that has a PayPoint service.
- – Someone else: Your prepaid card can be topped up by others – your company can transfer your pay to yours card if you use it instead of a traditional bank account.
To withdraw funds from your prepaid card, just put yours into a cash machine, enter your PIN, and follow the onscreen instructions. Keep in mind that certain prepaid cards impose a fee for cash withdrawals.
4. Whether Prepaid Card Safe or Not?
The money you use to top up yours is termed electronic money (otherwise known as e-money). As a result, your money is not protected by the Financial Services Compensation Scheme in terms of safety (FSCS).
This does not mean that prepaid cards aren’t secure. However, it does make you more conscious of where your money is held. One alternative is to just put money on yours that you need for things like quick spending.
While prepaid cards are not insured by the FSCS, the Financial Conduct Authority regulates and protects them (FCA). Before offering a prepaid card service, providers must be an authorized ‘E-Money’ institution.