If you don’t have a traditional bank account or want a simpler way to manage your money, you might be wondering: are prepaid cards actually worth it?
The short answer is yes. Prepaid cards are a handy and hassle-free way of paying with a debit card even if you don’t have an online bank account. They work like debit cards but only use money you’ve already loaded.
This blog breaks down the main advantages of prepaid cards and applies them to real-life situations.
Table of Contents
- What Is a Prepaid Card?
- Prepaid Card Advantages
- No Credit Checks
- Prepaid Cards Can Help You to Budget
- Reduce the Risk of Debt
- Send and Receive Money with a Prepaid Card
- Shop Online
- Withdraw Cash from ATMs
- More Secure than Carrying Cash Around
- Suits Me® as a Prepaid Card
- Is Suits Me® a Prepaid Card
- Can Anyone Open a Suits Me® Account?
- How Do I Get a Suits Me® Card?
- Frequently Asked Questions
What Is a Prepaid Card?
A prepaid card is a payment card that you load with money before you use it.
Like a normal debit card, you can use it online, in shops or to withdraw cash. The difference is that there’s no overdraft; once the money runs out, the card stops working until you top it up again.
Prepaid Card Advantages
No credit checks
Unlike a bank account with an overdraft or a credit card, there is no element of borrowing or credit with a prepaid card.
When you apply for one, you won’t be subject to a credit check. All the provider will need to do is verify your name and address before issuing you with one.
This makes prepaid cards ideal for:
- People with bad or limited credit
- Those new to the UK
- Anyone who has been refused a bank account
Prepaid Cards can Help you to Budget
Once you load money onto your prepaid card, you can only spend the money that’s on it. There is no overdraft or credit facility involved. This means you can keep your spending under control without slipping into debt unnecessarily.
You can also load a set amount onto your prepaid card from your main bank account and commit to only spending that amount which is on your card. For example, you could load £100 onto your card for weekly expenses. Once it’s gone, you stop spending. This makes it easier to stuck to limits and avoid money stress.
Reduce the Risk of Debt
Since prepaid cards don’t have an overdraft, there is no way to fall into debt unexpectedly,
Once you have spent the money available on your card, it will simply stop working until you top it up again.
Send and Receive Money with a Prepaid Card
If you can’t open a traditional bank account for whatever reason, a prepaid card can be a good alternative.
Most prepaid cards offer similar features to normal bank accounts. For example, you can:
- Receive wages or benefits
- Pay bills by direct debit
- Set up standing orders
- Transfer money to others
A prepaid card allows you to set up those kinds of regular payments, so you don’t miss them.
Shop Online
A prepaid card allows you to shop for goods and services online, even you don’t have a current account with a bank. This allows you to shop in the comfort of your own home and because you are limited to the amount you have on your card, you’re less likely to go on an online splurge you might regret later.
Withdraw cash from ATMs
If you need cash, you can also withdraw it from ATMs using your prepaid card. You don’t need to be a customer of a specific bank to use an ATM to withdraw cash. Just be aware that some machines are operated by private companies that may charge a small fee to users.
More Secure than Carrying cash Around
If you get paid in cash, it may not be a good idea to carry it around in case it gets lost or stolen. A prepaid card is a more secure alternative as you can freeze or cancel it instantly, ensuring your money stays protected. This makes prepaid cards much safer for everyday use.
Suits Me® as a Prepaid Card
Is Suits Me® a Prepaid Card?
Although Suits Me® can fall into the prepaid cards sector, we offer much, much more than just a prepaid card.
Suits Me® customers are provided with an account with multiple features including an online account, mobile app and a contactless debit card. Other features include UK transfers, Direct Debits, Standing Orders and more. International transfers are also available via a partner in our app.
Can Anyone Open a Suits Me® Account?
Anyone currently residing in the UK,18 or over and have proof of ID in the form of a passport, UK driving license or National ID card can open a Suits Me® account.
How do I get a Suits Me® Card?
Opening a Suits Me® account is quick and easy via our online application form. Once the application is complete, you’ll receive your account number and sort-code, instant access to your online account and mobile app and your Suits Me® debit card will be with you within 3-5 working days.
Frequently Asked Questions
Do prepaid cards help build your credit score?
No. Prepaid cards don’t report to credit reference agencies, so use won’t improve your score. If building credit is your primary goal, a credit-builder card or basic bank account would be more suitable.
Do Prepaid Cards Charge Fees?
It’s important to check the provider’s pricing as some do. Fees may apply for top-ups, ATM withdrawals or international use.
What Happens If My Card Runs Out of Money?
Since there is no overdraft, your prepaid card will simply stop working until you top it up again.
Do prepaid cards help build your credit score?
No. Prepaid cards don’t report to credit reference agencies, so use won’t improve your score. If building credit is your primary goal, a credit-builder card or basic bank account would be more suitable.
Do Prepaid Cards Charge Fees?
It’s important to check the provider’s pricing as some do. Fees may apply for top-ups, ATM withdrawals or international use.
What Happens If My Card Runs Out of Money?
Since there is no overdraft, your prepaid card will simply stop working until you top it up again.
Can I get a prepaid card if I’ve been refused a bank account?
Yes, and this is one of the most common reasons people turn to prepaid cards. Because there is no credit check involved, a previous refusal from a bank won’t affect your ability to get one.
Is a prepaid card suitable for teenagers or young people?
Prepaid cards can be an excellent introduction to managing money for younger people. Because you can only spend what’s loaded onto the card, there’s no risk of accidental debt, and parents can control how much is available at any given time.
Can I receive my Universal Credit or benefits onto a prepaid card?
Yes, in most cases you can have benefits, Universal Credit, or pension payments paid directly into a prepaid card account, as long as the account has a sort code and account number.
Do prepaid cards expire?
Yes, like standard debit cards, prepaid cards typically have an expiry date printed on them. When your card expires, your provider will usually issue a replacement automatically and any remaining balance will be transferred across.
