By Bianca Gonzalez
A prepaid credit card works in the opposite way of a normal credit card, because instead of buying something with borrowed funds , you buy things with funds that have already been paid.
- You set your spending limit, not the card provider.
- You can't get into debt.
- Some providers take applications from customers in their early teens.
- Some pre-paid cards allow you to improve your credit rating by charging a monthly fee, which is treated like a tiny loan.
- A lot of prepaid cards offer cashback benefits for purchases you make on the card, particularly online.
- There's a Fee for setting a pre-paid card.
- There are certain transactions you can't use your pre-paid card for.
- Credit cards benefit from purchase protection by law under section 75 of the Consumer Credit Act, but prepaid cards don't have to offer this.