...Prepaid cards?

Do you want to spend money online, in shops at home or abroad without having the security concerns around linking your bank account details to it?

Well you can with a prepaid card. The concept is the same as a prepaid gift card or a prepaid mobile phone SIM card. A prepaid card looks like a credit or debit card, and gives you the ability to purchase products and services with a card but with a crucial difference - you can only spend the balance that has been preloaded onto the card. This means there is no risk of running into debt as it has no credit or overdraft facility. A prepaid card can also be useful if you are not eligible for a credit card through a poor credit history for example.

There are some obvious benefits to the prepaid card, which include:

• Availability - There are no credit checks, which means you can get a card without worrying about your credit history. All prepaid card providers will carry out an Identity check to confirm you are who you say you are.
• Control - prepaid cards are an ideal way to budget for yourself or help to manage your spending. Like a credit card you get a full breakdown of spending on the card so you can see what has been purchased, who from and when.
• No debt risk - With a prepaid card there is no chance of spending too much as you are limited to the amount you put on your card.
• The card for travel - As well as being able to top up the card, depending on the specific provider, you will be able to use it at ATMs worldwide.

The main disadvantage is that the cards carry a number of charges and fees which can add up. You will need to be careful about how you top up, as charges can vary for this, although there are free methods available. It therefore makes sense to look for a prepaid card with low sign-up, annual, monthly and top-up fees.

As with a credit card, shopping around is the key to getting the best deal for you. At the moment the prepaid card market has relatively few providers compared to the credit card market but competition is beginning to intensify which will in turn drive down costs and increase service.