Standard VS Prepaid Credit Cards – Pros and Cons
Author: weissheiss
In the UK consumers can enjoy a very good choice of credit cards, and these days the choice is better than ever, with something to suit everyone. In addition to standard credit cards, where you can enjoy a certain, specified amount of credit and spread repayments, you can now also opt for prepaid credit cards, which may prove useful for certain consumers. Although prepaid credit cards are not yet available from every card issuer, they are becoming increasingly popular in the UK.
Standard cards
With standard credit cards you can use your card to make purchases and cash transactions, and then you can repay what you owe. on the card over a period of time or altogether at the end of the month. If you clear the balance each month you won’t pay any interest, otherwise you will be charged interest on the remaining balance (unless you have an interest free credit card and clear the balance before the interest free period expires).
Pros:
Convenience and flexibility Being able to enjoy a specified credit limit Being able to spread the cost of purchases Enjoying rewards or interest free credit based on type of credit card Being able to avoid interest charged by clearing the balance each month
Cons:
Extortionate interest rate charges on uncleared balances on some cards Possibility of high charges for late repayments or for going over limit Potential to get into high levels of debt Risk of credit card fraud
Prepaid credit cards
With prepaid cards you can enjoy the convenience and ease of making purchases on a card, but you will not actually receive credit. Instead, you have to load the card with cash like a prepaid mobile phone. You can then use the card to make purchases up to the amount that is loaded on to it. This is a very effective way for those with poor credit and who are unable to get a regular credit card or a debit card facility to enjoy the ease and convenience of shopping by card rather than cash and cheque.
Pros:
Convenience and ease of shopping by card No risk of getting into debt No costly charges or interest fees Easy and convenient to load card with money Suitable for those with bad credit
Cons:
Having to have the cash upfront in order to make a purchase No additional benefits and rewards like many credit cards Cannot spread the cost of purchases
Posted in Prepaid Credit Cards | 
Tags: Credit Fraud, Interest Free Credit, Poor Credit, Prepaid Cards, Prepaid Mobile Phone, Repayments, Rewards, Uk Consumers