Advantages and Disadvantages of Prepaid Card
Advantages of prepaid credit cards
A prepaid credit card is not the same as the average credit card, there are a number of advantages:
Everyone is eligible. No NBB assessment is performed and you are not asked about your income.
More control over your transactions. You can only use money that you have deposited on the card. You therefore never spend more than desirable.
Widely accepted payment method. Prepaid credit cards are accepted less frequently than regular credit cards. But prepaid credit cards are accepted more often than bank cards. It can therefore be useful to keep a prepaid credit card as a reserve method of payment.
Disadvantages of prepaid credit cards
There are also some drawbacks to the use of prepaid credit cards:
Not always accepted. For example, with most car rental companies, you can not pay with a prepaid credit card.
You always pay forwards. A regular credit card offers free postponement of payment up to 30 days after the purchase. With a prepaid credit card the amount is directly debited from your current account.
Only a positive balance is possible. You do not receive credit with a prepaid credit card. You will therefore first have to transfer an amount to your card in order to use it.
Low limit. Most prepaid cards have a low transaction limit. This limits the possibilities for purchasing airline tickets, for example.
There are additional costs. You often pay per transaction, as opposed to a regular credit card. Collecting money and exchanging money is also expensive compared to a regular credit card and bank card. With some cards, charging costs are charged for topping up with cash or via the bank card. Upgrading via an online transfer is usually free.