The Prepaid Credit Card Alternative
When it comes to card products for financial needs, most Filipinos would instantly think of “Credit Card” and “Debit Card”. What many people may not know is that there is a third category of card product that enables users to pay by plastic using a pre-loading mechanism. In this article, we shall examine this category of card product – the Prepaid Credit Card.
What Is A Prepaid Credit Card?
Also referred to as a “prepaid card”, a prepaid credit card is a card product that allows you to purchase goods with plastic money, very much like a conventional credit card. The major difference lies in the fact that you have to “load” the card with money prior to using it. The concept is very similar to a prepaid account offered by mobile telecommunication service providers.
How Prepaid Credit Cards Work?
A prepaid credit card is, first and foremost, an instrument to store monetary value. Money can be loaded into the card at a bank branch or at an Automated Teller Machine (ATM). In the Philippines, the maximum amount you can load into a prepaid credit card is as much as you can..
When money is loaded into a prepaid credit card, cardholders can begin making purchases using the card. The act of making a transaction using a prepaid credit card is exactly like how a credit card works. You simply look for counters with the Visa or MasterCard sign (depending on which type of prepaid card you hold), then have your card inserted through a terminal just as you would a conventional credit card.
During the purchase, the value of the transaction is deducted directly from the amount stored within the card. In the event that the stored amount within the prepaid card reaches zero or isn’t enough to carry out the purchase, the transaction fails.
Additionally, a prepaid card can also be used to withdraw money which has already been pre-loaded into the card but for a fee of PHP50 and you can only do it over-the-counter (OTC).
To withdraw pre-loaded money from a prepaid credit card, a Personal Identification Number (PIN) is needed. Commonly, this PIN is mailed to the cardholder a few weeks following successful registration.
How to Keep Track of Prepaid Credit Card Spending
Just like a normal credit card, a statement showing the amounts of purchases made as well as fees and charges incurred on the prepaid card is made available to the cardholder online or mailed to the cardholder on a monthly basis, unless you opted to have it only online. Depending on the bank or card issuing company, the statement may be free or may come with a monthly charge.
How Do I Get a Prepaid Credit Card?
Prepaid cards are relatively new to the Philippines. To get one, simply approach any bank and inquire at the service desk or you can search online for the offers.
Who can use a Prepaid Credit Card?
Anyone can use it! Even if you are 12 years old, since online shopping is getting famous, one of the ways teenagers can get their own stuff online is via a prepaid credit card. Easy and convenient and it makes sure that you only spend what you earn or save, if you are a teenager.
Alternatively, if you’re looking for a conventional credit card that fits your requirements, you can start comparing using our credit card comparison table.