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FAQ's
This PayPal introductory guide to prepaid cards has been prepared to try and help you better understand what these cards are, how they work and where you can use them. Plus we also look at some of their general features.
What are prepaid cards?
In their most simple form, prepaid cards (sometimes called pay as you go cards), are cards pre-loaded with money. Usually they have a familiar credit card symbol in the corner like Visa, MasterCard or American Express. This means you can use them almost anywhere that payment logo is accepted. You can usually also use them to pay for items abroad and on the internet. Prepaid cards come in many guises - For instance, they may be single load or reloadable.
How do prepaid cards work?
A prepaid card is a payment card loaded with money. If you have a reloadable card, periodically the money (or funds) on the card can be topped up. As long as you have enough money available to top up your reloadable card, you can continue to use your card to buy what you want.
A prepaid card looks like a debit or credit card provided by a bank and shares many of the same characteristics. However, unlike a credit card (and this is an important difference), you can only spend the money loaded on the card. This means you should not get into debt with a prepaid card.
Where can I use a prepaid card?
Usually wherever the payment logo on the card (whether its VISA, MasterCard, American Express) is accepted. If the card is accepted then you may use it as follows:
On the High Street
Simply hand your card to the salesperson at the till.
Telephone shopping
Read out the card details over the phone
Catalogue shops
Use the order form including the card details
Internet shopping
Type in the card details at the checkout step of any internet purchase
Mobile top up
Use it to top up your mobile phone
Travelling Abroad
Use it instead of travellers cheques
Withdrawing cash from ATMs
Use it to get cash from high street hole in the walls
Generally, you can use prepaid cards at most of the places you can use a debit or credit card.
How is money loaded onto my prepaid card?
Topping up a reloadable prepaid card is easy. When the amount remaining on your card is low, or empty, you can top up (sometimes called reloading) your card in a number of ways. For instance, with the PayPal Card, you can top up your card by:
a funds transfer from your PayPal account, if you have one
asking for a top up at your local post office
via a PayPoint facility
It is best to check with your card provider for "top up information" relating to your card.
Prepaid card benefits
Prepaid cards are becoming increasingly popular for people who want the convenience of using a card but want to try and stay in control of their spending.
Control
Can help you budget
Usually, no interest charges on the card
You shouldn't get overdrawn on the card
Convenience
Prepaid cards can normally be used wherever the payment logo appearing on the card can be used (this could be MasterCard or Maestro, Visa or Visa Electron or AMEX)
Usually, anyone can get one - no need for credit checks or a credit history but for reloadable cards, you will normally need to provide evidence of your identity
Security
If the card is lost or stolen, with most cards, you should be able to arrange for access to the funds on the card to be blocked
A prepaid card could be an ideal solution for you if you:
are travelling abroad and don't want to carry cash or traveller's cheques. With most prepaid cards, you can arrange for access to the funds to be blocked if the card is lost or stolen
want to help younger family members learn about managing their money. Generally, they can only spend as much money as is loaded onto the card and spending habits can be viewed online
want to manage your money by separating it into different "pots" for different purposes
are having difficulty opening a bank account or getting a credit or debit card for some reason. You do not need to pass a credit check to get a prepaid card but you will usually need to provide evidence of your identity (see below)
So what information will I be asked to provide to get a card?
To get a prepaid card you may need to provide proof of:
your identity
your postal address
You won't need to provide:
details of any credit history - there are no credit checks because this isn't a credit card
Choosing a prepaid card
There are many types of prepaid card available. Some are single load cards and others are reloadable. Look at the features of each card and consider those that are important to you, such as online account management, the ways in which you can reload the card, and the availability of additional cards on the same account. It makes sense to choose a card that has low fees and charges for the way in which you want to use the card most.
PayPal have made arrangements with The Royal Bank of Scotland plc, to launch a "PayPal" branded prepaid card. You can find out more about it here.
Last edited by geoneo123 : 13-08-2008 at 17:55.
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