Find the best prepaid card for you, whether you're looking to manage your finances, earn cashback or save on foreign transaction fees.
We're on a mission to improve the finances of the nation by helping you to spend wisely and save money
We're on a mission to improve the finances of the nation by helping you to spend wisely and save money
By Matt Fernell, Editor at Finance.co.uk.
Prepaid cards are an alternative to credit or standard debit cards. Here’s what to look for when choosing a prepaid card for yourself.
To find the best prepaid card for you, think about what you need the card for. They're useful for lots of reasons, and understanding how prepaid cards work and how you’ll use them will help you choose the right one. Some of the main reasons to get a prepaid card include:
If you have a poor credit history - you can get a prepaid card without a credit check, and some can help you improve your credit score.
If you want to stick to a set budget - you can only spend what you load onto your prepaid card, which makes it easier to stick to a budget.
For your kids to spend pocket money - prepaid cards for teens allow you to load a set allowance onto a card they can use and manage - here's how they work.
Travelling abroad - prepaid travel cards come with competitive exchange rates and are a safe and convenient way to spend abroad - here's how they work.
As a business owner for employers - business prepaid cards can used for company expenses, or as a way to pay salaries and bonuses.
Ideally, you'll want a prepaid card with no or low fees, but it’s important to understand what the fees are for and not to discount cards with high fees.
Once you understand your needs, you can start comparing prepaid card deals. Look at the fees each card charges; common fees include:
Transaction fees: This fee is charged every time you use the card to make a purchase. It is set as a percentage, e.g. 1% - so a £10 purchase would result in a 10p transaction fee. Most cards don’t charge a transaction fee.
Monthly fee: This is a fee you pay every month you have the card until you cancel it. The amount charged varies, but tend to range between £5 and £15 a month.
Card fee: This is a one off fee when you first purchase the card, and can range from £1 to £15. This fee is sometimes waived if you agree to top up your card with a certain amount.
ATM fee: This fee is charged every time you use your prepaid card to withdraw cash from a cash machine. This is either charged at a flat rate, e.g. £1 per withdrawal, or as a percentage of the amount withdrawn, e.g. 1%.
We show the fees each card charges above, to help you understand which one is right for you. Be sure to look to see what benefits come with the card, and not just the fees it charges.
For example, a card with higher fees may offer better rates of cashback that make it cheaper overall compared to a card with lower fees.
Also consider how often you’ll use the card. If you plan to use it every day, a card with monthly fees but no transaction fees could be the best option. If you only plan to use the card occasionally, a card with transaction fees but no monthly fees will probably work out cheaper.
You can use a prepaid card in the same way as you would use your debit or credit card. That means you can use it to:
Shop on the high street
Buy goods and services online
Pay in pubs and restaurants
Spend abroad
Withdraw cash from an ATM
Pay your bills
All prepaid card transactions in the UK are processed by Mastercard or Visa so you can use your card anywhere you see the Mastercard or Visa acceptance logos.
Prepaid bank cards are ideal if you don't have a current account and need a secure way to spend online. They're also popular for spending abroad, gifting and helping kids and teenagers learn to manage their money.
The biggest advantage of a prepaid card is the freedom and control it gives you over your spending. You don't need to apply for a current account and you can even get a prepaid card with bad credit.
Here are the main pros and cons of getting a prepaid card.
No credit check required
No current account required
Great for budgeting and credit building
Manage your money via your mobile
Real-time balance and spending views
Protects from theft and fraud
Earn cashback and rewards
Fees can become costly
Limits on top up and spending
May not work for certain transactions
No credit or overdraft facility
Possible inactivity fees
May not have FSCS protection
No Section 75 protection
Here are the five most important things to consider when choosing a prepaid card that works for you:
Make sure your card is issued by Mastercard or Visa so that it’s widely accepted
Get the right card for you, e.g. a prepaid travel card to spend abroad, a prepaid card for teenagers if using it for your children, or a business prepaid card if you need one for business use
Check the fees suit your usage, e.g. avoid high transaction fees if you plan to use the card all the time
Factor in rewards like cashback when working out the cost of your card
Look out for hidden fees and restrictions like inactivity charges if you don’t use the card, or limits on how much you can load on to the card
The information provided does not constitute financial advice, it’s always important to do your own research to ensure a financial product is right for your circumstances. If you’re unsure you should contact an independent financial advisor.
Yes, you can withdraw money from your prepaid card by ATM, but you may be charged a fee.
Yes, you can have money on your prepaid card refunded to your bank account, but there may be a charge. It makes more sense to spend the money on your card rather than transfer it back to your account.
Yes, you can. However, Amazon do have some restrictions around using prepaid cards, listed below:
Some prepaid cards will require you to be over 18, but there are a number available for teenagers.
Prepaid cards for children and teenagers need to be signed up for by a parent or guardian. They then manage the card for their child, including adding money and monitoring the balance.
Virtual prepaid cards work in exactly the same way as physical cards. They can be used online with all your favourite retailers.
Yes, you can. You don't need to be credit checked for a prepaid card in the same way as you would if you were applying for a current account or credit card.
You may still have to have to go through identity checks and card providers might look at your credit record for any evidence of fraud or money laundering.
Owning a prepaid card will not affect your credit score negatively, but if used sensibly it could help you repair your credit score.
Some prepayment cards are designed to help you rebuild your credit rating. This makes them a good option if you need to rely on prepaid cards because you have a bad credit record or can't get a bank account because you don't have proof of address or income.
