Prepaid Credit Cards
Our favourite for February
Best Prepaid Credit Card Package
Orange prepaid card
- No credit checks or bank account needed
- No monthly or transaction fees!
- FREE loading via bank/debit card
- Rewards scheme translates to Orange credit
- Load wages direct
Also consider
Best Prepaid VISA Card
Virgin Prepaid VISA Card
- No credit checks or bank account needed
- Pay monthly or pay-as-you-go options
- Cheap running costs
- Discounts across Virgin Group Companies
- Load wages direct
- Where prepaid cards score is they offer predictability if you’re on a budget. You can’t easily get into trouble with a prepaid credit card, or spend beyond your means.
- There’s usually a fixed monthly fee, or a small levy every time you use the card. What money you have and can afford to spend, you can load onto the card when it suits you.
- Watch out if you’re using a £ Sterling payment card of any type abroad – you may be subject to transaction fees that can upset your budget. On most cards these are a minimum of 2.75% as well as the exchange rate applied to the transaction, but we now list UK issued foreign currency cards that can be preloaded with US $ or Euros prior to travelling to avoid these charges.
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Here’s our selection of the best prepaid credit cards
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Orange Prepaid Credit Card | Orange rewards points 1 for every £1 spent | Prepaid | Prepaid |
Contactless payment Very competitive charging structure Orange rewards points FREE loading via bank or debit card
What's not to love! |
CashPlus Gold Prepaid MasterCard Credit Card | Top prepaid card, cash-back & comes with Euro card | Prepaid | Prepaid |
CashBuilder feature to build credit rating Purchase Protection Cash back and rewards Shop online |
Virgin Money Monthly Prepaid Visa Card | No bank account needed, no credit check! | Prepaid |
Discounts with Virgin Companies Free top ups No transaction fees in UK Monthly fee ATM fees No purchase protection Expensive to use abroad |
Kalixa Prepaid MasterCard Credit Card | No fees or commission on foreign exchange | Prepaid | Prepaid |
No overseas transactions charges Free loading No monthly fee or transaction charges Online account access No purchase protection |
ClearCash Prepaid MasterCard Credit Card | Ryanair Fees Free, application fee reduced to £4.50 | Prepaid | Prepaid |
Low set-up fee Purchase protection on monthly option Free online budgeting tool Free of Ryanair surcharges High fee for monthly option |
Virgin Money PAYG Prepaid Visa Card | Great for London 2012 Olympic Tickets. The smart way to carry cash | Prepaid |
Ideal for London Olympics tickets Free top ups Available to under 18's Discounts with Virgin Companies No purchase protection ATM fees 2.95% charge on each purchase Expensive to use abroadPrepaid Credit Cards Guide
One of the most dynamic and responsible financial products of our time, prepaid credit cards or pay-as-you-go credit cards are one of the fastest growing financial products around.
Some say prepaid credit cards aren’t credit cards at all, they offer no proper line of credit, although they usually carry credit card brand logos (like Visa or MasterCard) and operate via their settlement systems and rules.
Because no credit is actually given with prepaid cards (the person the card is issued to has to pre load any money they want to spend on the card) prepaid credit cards can be made available to almost anyone, regardless of background, employment status or indeed credit worthiness.
Like many UK financial products, prepaid cards originated in the US, and were originally designed to enable people who didn’t qualify for a full blown credit card to make card purchases particularly online. However the easy card holder acceptance and security of prepaid credit card schemes has made them popular with people from all walks of life.
A number of new credit card brands have sprung up to take advantage of the prepaid card model and there are some innovative new products around with some tempting promotional packages. There are even “Gold” prepaid cards around that look just like their mainstream credit card equivalents!
If you’re in a position to be accepted for an ordinary current account with a High Street Bank, with its associated benefits of a debit card and normal credit cards, it’s not likely that a prepaid card will appeal to you much.
However, there are some novel features on some prepaid cards that put their ‘real’ credit card cousins to shame so don’t write them off. For a start there are a number of prepaid cards now that offer no surcharges on foreign transactions. The better cards are even offering cash-back schemes.
So who are prepaid credit cards aimed at?
Business Users
New businesses and and sole traders struggle to get access to mainstream corporate credit cards, prepaid cards offer immediate and guaranteed acceptance with no credit check. Prepaid cards give business owners online access to card accounts, enabling tight control of spending in the crucial early stages of a business, with less risk of fraud and overspending. |
Travellers & Holiday Makers
As a marketing incentive a number of new prepaid credit cards are offering either € Euro or US$ cards enabling credit to be loaded in the currency it’s to be spent in avoiding the FX surcharges. There are also a number of £ Sterling based prepaid cards, with and no overseas FX surcharges. These are compared in our overseas credit card tables. |
People with poor credit history
The best shopping and utility company deals are found online these days. With a prepaid card even those on low incomes , or with previous credit problems, have the ability to compare prices, and shop online without danger of getting into unmanageable debt. Prepaid credit cards can also be used to pay installments. |
Under 18’s
Parents can see in detail where and when money is spent, and if needed top the prepaid cards up quickly online from their current account, online, real-time in an emergency. Teenagers love the ‘Street Cred’ of having their own credit card, and prepaid cards with the usual online account tools encourage responsible budgeting and money management. Credit cards for under 18′s. |
Students
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Recently moved to the UK?
Prepaid cards offer a great option to enable safe payment in the early days, and some prepaid credit cards even of the option of CreditBuilding facilities. Prepaid cards can accept wages or salary payments straight onto the card account saving the bother of cashing cheques. |
Prepaid credit card companies have launched prepaid cards for businesses. This allows companies of all sizes to keep a tight control on expenses for employees on the road. Budgets can be assigned monthly and financial controllers can have online account access to track payments and manage expenses costs.
It used to be that paying by credit card when you traveled overseas meant access to the best exchange rates for your currency, as well as a useful, safe method of payment. However, increasing foreign exchange (FX) surcharges, and poor exchange rates on some mainstream credit cards have made this a thing of the past.
Even if you have had issues with credit cards or loans in the past, prepaid cards are normally available to you, even if you’ve had defaults, or CCJ’s. You don’t even have to have a job or a verifiable income.
Several prepaid cards are available to under 18′s and teenagers, some as second cardholders only. Prepaid cards are a safer home for allowances and pocket money than cash.
Prepaid credit cards are very popular with students. The prepaid business model offers all the advantages of mainstream credit cards, security, convenience, cash-back, and online budget management. Prepaid cards however need no credit check and avoid the dangers of getting into debt or being faced with unplanned ‘late payment’ or ‘over limit’ fees as you can only spend cash that’s been credited to the card.
Many people who are new residents to the UK face a challenge setting up bank and credit card accounts until they’ve got an established credit history.The key advantages to you of prepaid cards:
- You set your own credit limit*
- No bank account needed and no credit checks
- No contracts or tie ins
- No interest to pay
- Fast top ups
- Draw cash when needed from ATM’s or cash points
- No late payment penalties, over limit fees or hidden charges
- Great for secure internet shopping
- Your salary or wages can be paid straight onto some cards
- Purchase protection and money transfer options on some cards
- Credit repair and credit builder options on some cards
Charges
The charging structures of prepaid credit cards can look complicated. With traditional credit cards the card companies make most of their money out of offering (and charging handsomely) for lending money. With prepaid cards clearly there’s no opportunity for the card issuers to do this and so they have to make money other ways.
The fees on prepaid card tend to break down into 2 distinct styles.
Type 1 – Prepaid Cards that charge a Monthly Fee
A £5 to £10 ‘set up’ or ‘card issuing’ charge and then a fixed monthly fee of between £5 and £10 for regular users of the cards. If you’re going to use a prepaid credit card regularly this will probably work out the cheapest overall option. With this type of fee model your UK purchases are normally free of other payment surcharges, and there’s usually purchase protection included. You’ll also pay a lesser fee if you withdraw cash from an ATM.
Type 2 – Pay-as-you-go Prepaid Cards
Suited to occasional and emergency use, the pay-as-you-go prepaid cards still charge you a set-up or issuing fee, but then don’t charge you an on-going set monthly charge. Instead they levy a surcharge each time you use the card, typically 2.5% to 2.95% for UK retail transactions.
| CashPlus | 2.95% |
| Virgin Prepaid Card | 2.95% |
| ClearCash | 2.5% |
| BlueSky | £0.66p |
This has the effect of making everything you shop for with the card 2% – 3% more expensive, but saves the on-going monthly fee!
Prepaid Credit Card ‘Gotchers’!
- Most of us are used to the mainstream credit card business model and charges. Prepaid credit cards do work in a different way so make sure you understand the differences.
- Most prepaid credit cards charge a replacement fee if your card is lost, damaged or stolen.
- Don’t overload your prepaid card with money you may want to deduct from the card later and put back into a bank account. Most prepaid cards will charge you a fee of around £10 to pay money back to you. Cash withdrawals from ATM’s are also charged.
- Some prepaid cards charge eye-watering foreign exchange (FX) surcharges, particularly the pay-as-you-go types. If you’re shopping online for goods you’re buying abroad, or planning on taking your prepaid card on holiday watch out.
If you want to use your prepaid card for any purchases not charged in UK £ Sterling, take a look at our overseas credit cards. A number of them work the prepaid model in other currencies (meaning there are no FX transactions charges if you’re shopping or paying in the currency the card is issued in), some are FX fee free. - Many prepaid cards expire 1 year after the date of issue and on automatic annual replacement, charge you a new card issue fee.
- Most cards allow top-ups via bank transfer, standing orders, cash at the PostOffice ® or via a direct wages deposit for free but many will surcharge you if you top up by cheque, via another credit card or at a PayPoint.
- Some prepaid cards work with PayPal ®, but will restrict your spending until further checks have been carried out and a bank account verified.
- Some prepaid credit cards offer CreditBuilder options. This works by them ‘loaning’ you the annual fee for the card (typically £60) and then you paying the loan back at, say £5 per month over a year. If you make the payments every month on time, the prepaid card company can then report back to the credit reference agencies in the UK that you’ve successfully paid off the loan, boosting your credit rating. However, you must make every payment exactly on time, or this will have the opposite effect. We’re told they don’t send out reminders, and so if you want to use this facility you need to ensure that the £5 loan payment in cleared onto your account on time every month.
- Most prepaid cards limit you to the amount you can load onto the card account at any one time, some limit the amount you can spend on the account in a year, and most have a maximum balance at one time of between £3,000 and £5,000.
