Prepaid Credit Card
Paying with a plastic card has a long tradition. What exactly a prepaid credit card is and when it can be used is explained here. We also explain where the prepaid credit card is available.
Forerunners of the Prepaid Credit Card
The beginnings go back to 1950, when New York businessman McNamara first used a cardboard card to pay. This was the first forerunner of the prepaid credit card. Today, paying with a credit card has become commonplace. There are around one billion cards worldwide.
The majority of these issued cards are classic credit cards. Anyone who owns one uses credit provided by their bank. It was not so long ago that credit cards were issued only in elite circles. But times have changed. Today anyone can get a credit card when they apply for a prepaid credit card.
The Prepaid Credit Card: A Credit Card for Everyone
Until now, anyone who wanted to use a credit card not only had to demonstrate a certain income but also could not have any negative Schufa entries. For several years there have been credit cards on the market for which no Schufa check is carried out. There is no rejection; instead, in normal cases every applicant receives such a prepaid credit card.
The reason is that it can only be used on a balance basis. The principle is the same as with a prepaid mobile phone: top up first, then the card can be used up to the value of the balance. This card is called a prepaid credit card.
The Principle of the Prepaid Credit Card
Like a conventional credit card, the prepaid credit card can be used to pay online, at a store checkout or to withdraw cash. The only thing missing with this credit card is the credit line. Only what has been topped up beforehand can be spent. This is ideal especially for teenagers, because it prevents them from falling into debt in the first place.
But cautious cardholders also like to use this prepaid credit card for their vacation travel, because if it is stolen the loss is smaller than with regular credit cards. This card works wherever there is an electronic terminal for reading it.
Interest on the Balance of the Prepaid Credit Card
The prepaid credit card has further advantages. In some cases there is even interest on the balance. For banks, issuing such a credit card is a lucrative business without risk.
For issuance most banks charge an annual fee. Customers are happy to pay this, because without this credit card they would not be able to benefit from one at all.
In addition to interest on the balance, there are also banks that have set up a current account function with this prepaid credit card. For example, it is possible to make transfers with the balance on the card or to have wages and salaries paid onto it.
The Advantages of a Prepaid Credit Card
- As already mentioned, this credit card is Schufa-free. So even consumers with a negative Schufa credit report have the opportunity to pay cashlessly at home and abroad, because creditworthiness does not play a role with this credit card.
- Externally it only differs from a real credit card by the fact that embossing is missing.
- Otherwise there is no way to tell that it is a prepaid credit card. The card can be topped up by transfers to the bank's account.
- Account management is done online, so the account balance is always immediately visible on the PC.
Where to Get the Prepaid Credit Card
Most banks offer their prepaid credit card via the internet. After the user has applied for one, the form for the PostIdent procedure only needs to be printed out. This procedure serves for identification and is completed by the employees at the post office counter and sent to the bank.
Within a few days the card will be delivered to its new owner. As with other cards, the PIN is sent separately. After the first top-up the prepaid credit card is ready for use immediately and can then be used within the scope of the balance.