Prepaid Credit Card in the UK

Are there advantages to a prepaid credit card UK? While you may not have heard about these prepaid cards very often they do serve an important purpose. There are several reasons we all look for a credit card and most of the time it is because we want to go on vacation or have something to use in case of an emergency. For those who have had financial trouble in the past the prepaid credit card is one of the best things they can obtain.

What is a prepaid credit card UK? First a prepaid credit card is a card that has a set limit that you have given the card. You have paid a certain amount of money to the MasterCard or Visa card so that you can use it. This means that instead of the company giving you a limit on the card, you have set the limit and can use the card until that balance or limit runs out.

What are the reasons for choosing a prepaid credit card UK? For those who have had poor or bad credit history they may not be able to find a credit card company willing to offer them a credit card any time soon. This means that they have no way to increase the outlook of their credit history. Most often a credit card is your way to establish a credit history and to improve that history when you have suffered in the past from less than stellar credit. When you have a prepaid credit card you are obtaining a card with an actual limit that you have paid in advance. This means the credit card company is not out any money and you are improving your credit history.

Think of a prepaid credit card UK as a debit card. You will send money to the issuing company of the credit card. This balance will be drawn on every time you use the credit card, much like the debit card with your bank. You can reload the credit card with your own funds every time you need to increase the amount on the card. Most credit card companies think of them as stored value debit cards rather than prepaid credit cards because they are used for debiting amounts. The thing about these credit cards is that the issuing company is reporting to the credit reference agency about your card making your credit history improve as long as you keep a sufficient balance on the card and never use the entire amount.

Another reason to choose the prepaid credit card UK is the ease of which you can usually obtain this kind of card. When credit problems have stopped you in the past for getting cards you will find the prepaid cards are easier to get. You are actually assuring the bank that you have the money before you even use the card because you have transferred an amount to the card. Rather than taking a risk that they won’t get their money they already have the money.

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