pros and cons of prepaid credit cards

Advantages and Disadvantages of prepaid credit cards

Looking to get a prepaid credit card ? want to know the some of the pros and cons of getting a prepaid credit card ? At loan nz we have put together a list of some of the major advantages and disadvantages of prepaid credit cards. Check out some of the advantages and disadvantages of prepaid credit cards. 

Advantages of Prepaid Credit cards

  • Prepaid credit cards are available to anyone regardless of credit rating.

  • Most prepaid credit cards offer cashback benefits on purchases made on the card.

  • As there’s no credit facility there is no way of getting into debt.

  • Prepaid credit cards work the same way as credit cards and debit cards, so they can also be used abroad.

  • The spending limit is set by the card holder not the card provider.

  • Prepaid credit cards can help rebuild bad credit history.


Disadvantages of prepaid credit cards

  • There is always the case of unnecessary fees with signing up for a prepaid credit card. Fees that a customer may want to look out for: purchases using the card, loading money onto the  card, monthly fees, taking cash out at an ATM.

  • Credit cards and debit cards have protection on purchases while prepaid credit cards don’t. 

With prepaid cards, the advantages always out-weigh the disadvantages, but one can never be too careful when it comes to monthly payments with any financial commitments. Miss any monthly payment and you’ll be in a worse position than when you started.