Frequently Asked Questions

Fees can include:

• Monthly fees (sometimes referred to as admin or management fees)
• Application fees (sometimes called set up fees)
• ATM or cash machine usage fees (UK and overseas)
• Foreign transaction fees
• Top-up fees (some top-up options may be free)
• Card replacement fees
• Inactivity fee (when your card is not used for a prolonged period)
  
  

The above is not an exhaustive list, and not all fees will be applicable. For example, you may find there is a fee to top up your prepaid card using your debit card, but it's free if you top up by bank transfer. We explain fees in more detail in the guide: "How to find the best prepaid cards?" under the section: How much do prepaid cards cost?

You may want to think about getting a prepaid card if you:

• Have a poor credit score
• Want help with controlling your spending
• Want to earn rewards and cash-back at selected retailers
• You don't want to carry cash while abroad
• You need a travel card that can hold multiple currencies
• Have children and want to help them learn about money
• Need an alternative to a traditional bank
• Have a small business or are a sole trader

In short, the answer is no. When you make a purchase with a credit card, you are borrowing to make a purchase. That money is then paid back and may be subject to interest charges. With a prepaid card, you are using your own money, not borrowed money. And unlike a debit card, you cannot go overdrawn. To learn more see our article Prepaid card VS Credit card - What's best?

As prepaid cards are chip and PIN protected, just like most debit or credit cards. Prepaid cards are not linked directly to your bank account, so if your details are compromised while shopping online or abroad, it will be less likely someone will have access to your bank account funds. However, the money in you prepaid account may be accessed, so you should always protect your card details and never share your PIN with anyone.

Some prepaid card accounts come with an app that allows you to freeze or block your card. Prepaid cards are not protected by Section 75 of the Consumer Credit Act. However, depending on your provider, you may also be allowed a payment reversal (chargeback) when purchasing using your prepaid card. Your card provider is not legally required to provide this service.

Payment providers and e-money accounts, including most prepaid card accounts, are not covered by the Financial Services Compensation Scheme (FSCS).

No. Prepaid cards don't offer credit or overdraft facilities. As a result, prepaid card applications will not impact your credit score and will not show on your credit report. Some providers may have some form of credit or lending; however, these usually are add-ons in an app or provided by a third party. Applying for these additional services, if available, will likely affect your credit score.

As prepaid cards don’t have an overdraft facility, you cannot go overdrawn. If you try and spend more than your balance, the transaction will usually be rejected. So it may be helpful to regularly check your current balance on the card’s app, especially before spending.

Prepaid cards are increasingly popular cards for travel with holiday makers, as an alternative to cash or travellers cheques. They are generally accepted anywhere that accepts Visa or MasterCard (depending on your card), and you can also draw cash out at cash machines abroad, giving you a lot of flexibility. However, there may be charges when using your card abroad, particularly when withdrawing cash.

Prepaid travel card accounts are specifically used for travel purposes allowing you to spend in other currencies (sometimes called currency cards). They usually offer competitive exchange rates and some don't charge foreign exchange fees. Not every currency will be available on prepaid travel cards, so make sure you do your research before applying for a prepaid card for use abroad, and always check fee costs.