Prepaid cards are reloadable. You add cash to them and top them up if the funds run out, just like a pay-as-you-go mobile phone. You normally can use a prepaid card the same way you would a debit card to make purchases online or in person.

How do prepaid cards work?

You can buy a prepaid card at some retailers or you can get one online. They are designed for everyday spending and there's usually a limit on how much you can load. This varies depending on who you get the card from.

Most prepaid cards are either Visa or MasterCard. This is the company that processes the transactions on the card. So, once you have loaded your card, you can use it any restaurant, shop or online retailer that accepts Mastercard or Visa.

The advantages of a prepaid card

  • Budgeting: You can only spend what you load. If you are prone to overspending, a prepaid card is a good way to make sure you stay on budget.

  • Security: Prepaid cards limit the damage scammers and fraudsters can inflict on you. The most you could lose is the amount you loaded on to the card.

  • Students: They are a good way for parents to teach students about financial responsibility by only giving them access to smaller amounts of money.

  • Travel: If you don't want to carry cash when you're travelling, prepaids cards protect you. They normally let you cancel them if they're stolen and aren't connected to other accounts.

How to choose the best prepaid cards for you

The best prepaid card is one that is the cheapest and easiest to use. Some of the features and costs to look for are:

  • Application fees: Most cards charge a fee when you open your account, although some cards waive this if you load over a certain amount.

  • Monthly fees: Most cards charge a monthly fee that ranges from 2-5.

  • Renewal fees: Just like your debit card, prepaid cards expire after three years. Some cards will charge a renewal fee to get a new card. This can be waived if your load a certain amount of money.

  • Transaction/ Withdrawal fees: Most prepaid cards charge a fee for every transaction you make. For ATM withdrawals, the fee is either a set amount, such as 2, or a percentage of the transaction.

Types of prepaid cards

Prepaid cards with sort code and account number

Some prepaid cards offer basic banking facilities, such as a sort code and account number. This means you can have direct debits and standing orders. This is useful if you want to set up payments for recurring bills.

Visa vs Mastercard

The main difference between a prepaid MasterCard and prepaid Visa card is the exchange rate for spending abroad. The rest of the costs are set by the card provider. Picking a card with the lowest fees could save you more money than choosing between Visa and MasterCard.

Prepaid cards for budgeting

Monthly prepaid cards are a useful way to manage your spending. Once you've loaded the card with cash, you pay a monthly fee for the card, but transaction and withdrawal fees are lower.

Prepaid travel card

Single currency prepaid cards: You can load up the card with Euros and use the card when you're abroad. This way you can save on currency conversion fees that most banks charge on debit and credit cards.

Multi currency prepaid cards: These are prepaid travel cards that let you make transactions abroad without expensive fees or charges. You can load any currency on to the card and use in any country. The transactions will be automatically converted into the local currency.

Prepaid cards for bad credit

If you'd had trouble getting a card because of your credit history, a credit-building prepaid card can help you improve this. Anyone can get a credit-building card, but you have to opt in for service. This lends you a year's worth of monthly payments, which range from 5 to 10. You are then supposed to repay the amount over a 12-month period. As you keep making the repayments, your credit score will improve.

Prepaid cards for students

Pay-as-you-go prepaid cards are designed for teenagers and students so they can learn to be financially responsible. It also helps parents keep track of their spending. While these don't have monthly fees, they charge higher transaction and withdrawal fees.

How to use a prepaid card

Using a prepaid card is just like using a debit or credit card. You can use them online by entering the number and expiry date, or over the counter by entering your PIN. Many cards now let you pay with contactless, which can be used for transactions up to 30.

How to top up a prepaid card

The most common ways to top up your card are:

  • Online: You can sign into your account on the card provider's website or app and pay money in using your credit or debit card.

  • Cash: Some banks and retail shops offers PayPoint services, where you can pay cash. This is then loaded on to your prepaid card.

  • Bank transfer: Some cards let you transfer funds directly from a current account. You'll need to know your prepaid card's sort code and account number.

How much can you load on a prepaid card?

Different prepaid cards will have different limits for the maximum balance. Some have daily limits and monthly limits. For example, you may be able to load 1,500 using a bank transfer, but the top up limit using cash at a PayPoint could be 250.

Can I get a free prepaid card?

There are prepaid cards that don't charge any application fees, but you may have to pay transaction and withdrawal fees when you use the card.

How to buy a prepaid card online

You can buy prepaid cards at retail locations (such as newsagents), online or over the phone. They're also available from some banks and credit unions.

If you buy a prepaid card online, simply fill out the online form with your name, contact details and the amount you want to load. You may be issued a virtual card at first and receive a card in the post.

Prepaid cards FAQs

Q

Can I go overdrawn on a prepaid card?

A

No, they do not let you borrow money in any way. You can only spend what you have already added to the card.

Q

Can I get more than one card?

A

Yes, some let you take out additional cards for other people, e.g. family or friends. They can only spend the money added to their own card.

Q

Are prepaid cards good for travel money?

A

They can be used worldwide, and travel prepaid cards are usually cheaper if they hold the currency you spend in. Here is how else to spend abroad.

Q

How old do I have to be to get a prepaid card?

A

18 for some cards, but younger people could get a card with parental permission. Some providers issue cards to anyone over 6 years old.

Q

Is my prepaid card protected by Section 75?

A

No, Section 75 only protects credit cards. But the Chargeback scheme could help you get your money back if something goes wrong with a transaction.

About our prepaid cards comparison

Q

Who do we include in this comparison?

A

We include prepaid cards you can load with pounds sterling from our panel of providers. They are all from providers either directly regulated by the Financial Conduct Authority or providers that are partnered with a company regulated by the FCA. Here is more information about how our website works.

Q

How do we make money from our comparison?

A

We have commercial agreements with some of the companies in this comparison and get paid commission if we help you take out one of their products or services. Find out more here.
You do not pay any extra and the deal you get is not affected.