Prepaid Credit Cards

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	Typical APR Variable	Max Int Free
	8.5%	56 days
	14.9%	56 days
	14.9%	56 days
	14.9%	56 days
	14.9%	56 days
* Based on Lowest Standard Rates and is not a full search of the whole market

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Prepaid credit cards are proving increasingly popular although calling a card that you pay money onto upfront a credit card is perhaps a little misleading. Prepaid means you load money onto these cards before you can spend it and you do not at any point actually use credit because you never go into debt on the card. If theres no money on it, you have nothing to spend.

Who would want one of these prepaid credit cards? They are useful for young people and for those who have had credit difficulties in the past and may have problems actually getting an ordinary credit card.

With money loaded on them, prepaid credit cards allow you to make payments in all the ways you could make payments using an ordinary credit card. In fact you may use a prepaid credit card just as you would a standard credit card. Like ordinary credit cards, most prepaid credit cards are linked with either Visa or Mastercard.

The concept of prepaid credit cards is simple. Once you have loaded the card with cash you may use them wherever Visa or Mastercard credit cards are accepted. Prepaid credit cards have been described as credit cards without debt. Certainly you will never be faced with having to pay any interest!

However, that does not mean that prepaid credit cards are cheap. It will cost you between £8-10 to purchase a prepaid card, in addition to any money you actually load onto it. Thereafter, many cards charge annual fees of £4-5. Youll pay an ATM fee of 85p-£1 every time you draw money out of a cash machine and you may find there are similar charges made each time you add fresh money to your card.

How flexible and how friendly is that piece of plastic in your wallet or purse? Find out with Moneyextras credit card comparison service.

Last Updated: May 2007 © Moneyextra.com

Our senior editor Robin Amlôt recommends you should consider taking independent financial advice before acting on any article. Please contact us for help with your individual circumstances if any assistance is required.