Posts Tagged ‘compare debit cards’

1. Why you may wish to compare debit cards

   Posted November 3rd, 2010

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   If you are thinking about getting a prepaid cash card, then you may be wondering whether it is worthwhile to compare debit cards.

   You may, perhaps, be inclined to think that all debit cards must be pretty much the same.

   Surely one plastic card can’t be all that different to another?

   Similarities

   There are, of course, similarities and debit cards can typically be used to:

   • pay for purchases in stores, restaurants and other retail outlets;

   • withdraw cash at ATMS;

   • make purchases on the internet;

   • in ticket machines etc.

   Differences – prepaid card vs traditional card

   With a traditional debit card linked to a bank account, you may inadvertently run up an unauthorised overdraft, which could result in some fairly unattarctive unauthorised overdraft fees.

   With a prepaid debit card on the other hand, there’s no such possibility. You can only spend the cash you have previously decided to load onto the card.

   Differences – prepaid cards

   There are a number of suppliers of prepaid debit cards. Each card type may offer different facilities and fee structures – so you may want to compare debit cards to ensure that you get one most suited to how you intend to use your card.

   • The logo. All prepaid cards carry a logo, like MasterCard prepaid for example, and can typically be used wherever this is displayed. While cards branded with MasterCard can be used abroad, other cards may not be valid outside of the UK. So, if you plan to use yours while travelling, this may be an important consideration;

   • E-bank account. The suppliers of some prepaid cards – such as speed-e-card – can also offer online banking facilities. So you could have your salary paid into this account, set up standing orders etc. You would also typically be able to load cash onto your card online via bank transfers as well as through PayPoint;

   • Fee structure. You’ll typically find that charges may be levied on a number of transactions and services, depending on your card provider. Some may charge more than others for cash withdrawals, for example, or for sending statements to mobile phones. However, these should be all transparent.

   Before you actually start to compare debit cards, you may benefit from thinking a little bit about how you actually intend to use your card so you can get an idea of which one will be most suitable for you.

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2. Why compare debit cards?

   Posted September 13th, 2010

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   To compare debit cards, you’ll need to understand the difference between the various types.

   To start with, although there are many sub-types, plastic cards typically can be seen as falling into one of four categories:

   • credit cards;
   • debit cards;
   • prepaid cards / cash cards;
   • charge cards.

   Sometimes the terminology is used interchangeably and you may hear the use of terms such as prepaid credit card, bank debit card, prepaid credit card or charity card etc.

   This may be confusing and in reality, all card types can typically be thought of under one of the above categories.

   Credit cards

   Very familiar to most, they involve a credit limit that you can spend.

   If you repay back the amount spent each month then there is no interest charge. If you don’t then you’ll have a debt that you’ll need to pay off bit-by-bit each month in line with the card provider’s minimum payment policies.

   You will pay interest on any monies outstanding at the end of each month.

   To obtain a credit card, you’ll typically need to have a reasonably good credit history and be in employment.

   Debit cards

   Often provided by banks, these cards mechanically operate similarly to a credit card.

   Any money you spend is taken from an account (typically your bank account) that the card is linked to.

   Depending upon the bank’s policies, you can sometimes accidentally drift into an unauthorised overdraft when using these cards and the fees for that may sometimes be very high indeed.

   You get this type of card, you’ll normally need a bank account and to be seen by the bank as being of good standing.

   Prepaid cards & cash cards

   Once again, in use they are very similar to the above.
   The major difference is that you can only use the card to spend up to an amount of money you have previously loaded onto it.

   There is no risk of debt arising and there is typically no credit history check required.

   Charge cards

   There are certain card providers that allow high (or unlimited) spending limits on the card but which demand that the sum is repaid in one go at the end of the month.

   Typically these cards are restricted to wealthier individuals.

   Compare debit cards

   Shopping around to compare debit cards may help you find one that’s suitable for your needs.

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3. Trying to compare debit cards

   Posted July 13th, 2010

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   Not every plastic card is a debit card. That’s a pretty important fact to grasp if you’re thinking of trying to compare debit cards.

   Credit versus debit

   Firstly, there are debit cards and credit cards.

   Credit cards typically bring with them a credit limit – something that you may see as a permanently available loan. They may also bring with them an outstanding balance and the implications that may have for debt and interest charges.

   By contrast, a debit card is a plastic card that makes payment directly from a source of your money.

   That may be your bank account. In the case of a debit card, if you overspend on the balance sat in your bank account and go overdrawn, this may attract a fee and / or interest charges from your bank!

   There is also a prepaid debit card. This is not really a debit card at all as the money is not debited from a bank or other account. The balance is taken directly from your prepay card, so once you’ve spent the balance on the prepaid card, you cannot overspend or run up debt.

   Standard debit card versus a prepaid debit card

   Potentially, there are now two forms of debit card – something that’s quite important to understand when trying to compare debit cards. Just to recap …

   The first is the conventional bank account debit card. When you use the card, the spending is deducted from your bank account.

   If you have an overdraft facility (and sometimes even if you do not) you can use the card to spend more than you have available in hard cash.

   The newer form of debit card is the prepaid card. In that case you load an amount of money onto the card (perhaps through a PayPoint outlet) and you use the card as per any other form of card.

   The difference is that you cannot spend more than you have previously loaded onto it.

   Prepaid debit cards versus bank debit cards

   What’s the most suitable solution for you will depend upon your individual circumstances.

   In the case of a prepaid card, typically you won’t run the risk of running-up debt and incurring unauthorised overdraft fees if you get your sums wrong.

   You also typically won’t need a bank account and as no credit is involved, you won’t have to meet any credit check criteria.

   That may help you control your finances and have access to the flexibility of plastic even if you have a shaky credit history.

   The prepaid debit card may be an important contender in terms of options open to you, when you’re going to compare debit cards.

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4. Trying to compare debit cards, credit cards and prepaid cards?

   Posted April 9th, 2010

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   When we start talking about plastic cards, we sometimes tend to lump debit, prepaid and credit cards together. That can be confusing if you’re trying to compare debit cards as each type is different to the others. By knowing the main differences between these three types of plastic, you may be better versed in choosing the card that is suitable for your needs.

   The credit card

   While they are all convenient to use – especially if making online purchases or over the telephone – debit, prepaid and credit cards are quite different.

   A credit card typically brings with it what’s called a credit limit. That is effectively a form of on-tap loan that you can typically use at any time.

   Useful as that may be, you may also run the risk of spending more than you intend to and drifting into potentially serious debt problems as a result. You’ll also typically need to meet certain earnings and credit-history criteria before you’ll be able to get this type of card.

   The bank account debit card

   A bank account may provide what’s called a debit card. This acts as a form of electronic cheque and when you use it, checks will typically be made to ensure that your bank account has the funds in it to pay for whatever it is you’re trying to purchase.

   The bank account debit card typically gives the user full access to all funds that are contained in the account (and any pre-agreed overdraft). Some people may find this to be something of a security risk and of course, you’ll need a bank account to be able to get one of these cards.

   The prepaid debit card

   The prepaid card is identical to the bank debit card or to a credit card in terms of how it can be used on the High Street or online – except for the fact that it is not linked to your bank account, nor is it a form of credit.

   You simply load money onto it, typically by using one of the many PayPoint outlets that you’ll see around or via bank transfer. Once the money is loaded, the card can be used in all normal plastic payment roles and you can spend up to the amount that you’ve loaded onto the card.

   If you have a prepaid debit card you can’t spend more money at a given time than you have loaded onto it – helpful if you’re trying to control your spending.

   You also typically don’t need a credit history check to get one, so it may be useful if you have been declined for a credit card or bank account previously.

   So, if you are looking to compare debit cards, do note the key differences as described above. That way you can hopefully get the card that is most suitable for your circumstances.

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