Financial institutions like banks offer prepaid credit cards to help you go cashless without being exposed to any debt. Unlike regular credit cards, prepaid cards require you to transfer funds into the card account before you can begin using them. You can then pay online or offline until your balance is exhausted.
One of the significant factors differentiating prepaid credit cards from regular cards is that you are not borrowing any funds from the bank. So, if you are new to credit and cannot get a regular credit card, you can opt for the prepaid version instead.
Prepaid credit cards also come in handy for students who have little experience in handling credit. Read on to learn what are prepaid credit cards, their benefits and more.
Using a prepaid credit card, meaning a credit card that allows you to transact based on the funds you have loaded in your account, has many advantages. Before you delve into those, keep in mind that these cards work like debit or gift cards. This means that you can make purchases or other transactions until you exhaust the amount you have added.
There’s no need to stress when you reach the limit as you can reload your card with an additional amount. This way, you can set a monthly budget and plan your finances better.
Here are a few standout features of prepaid credit cards:
There are various kinds of credit cards that you can choose from based on your requirements. See the most common types here:
This type of credit card is affiliated with a payment network and carries the affiliate’s brand logo. These cards are usually accepted by a majority of merchants, so you can use it freely. Also referred to as open system cards, these cards may have affiliation with either Visa, MasterCard or American Express.
Unlike open loop cards, these cards will be accepted only at affiliated merchant outlets.
Most prepaid credit cards in India are reloadable, where you can add funds once you exhaust the amount.
As the name implies, you cannot reload the card once you have used the funds. A classic example of these cards is gift cards.
Here are some drawbacks of using these cards:
Studying the pros and cons can be helpful in determining whether or not to get a prepaid credit card. If you want to build your credit history and enjoy a bevy of perks, opt for the Fibe Axis Bank Credit Card. This is a numberless credit card that links to your UPI ID, so it gives better security against credit card fraud and identity theft.
Moreover, you can get up to 3% cashback on your transactions, free access to domestic airport lounges, and dining discount at partner restaurants! Download the Fibe Personal Loan App or register on our website to get the Fibe Axis Bank Credit Card today.
A prepaid credit card is a type of card that requires you to add funds to make purchases or execute transactions. It works like a debit or gift card, where you can load a specific amount and use the same to transact until you exhaust it.
Here are a few examples of prepaid credit cards in India:
Here are some of the drawbacks you can keep in mind: