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cumulus
Topic Author
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Pre-Paid Mastercard. Do You Use One?

Thu Jul 17, 2008 1:47 pm

Have just got a pre-paid Mastercard (which in short works in the same way as a pre-pay mobile).

I got it solely for Internet purchases and intend never having more than a couple of hundred quid on it at any one time. I have also given a additional card to my Daughter just in case of "emergencies" (which will probably mean a new pair of shoes).

Suffice to say, there is no nasty bill at the end of the month and if someone runs riot with it on the NET I won't lose too much.

I understand the running cost is five quid a month.

Do you have one? If so, is it worth the 60 quid a year?
 
trekster
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RE: Pre-Paid Mastercard. Do You Use One?

Thu Jul 17, 2008 2:27 pm

I have one from Cash plus.

With my not so good credit record, its no bother paying a fiver a month to have something for internet purchases.

I love the card.
 
gordonsmall
Posts: 2106
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RE: Pre-Paid Mastercard. Do You Use One?

Thu Jul 17, 2008 2:58 pm



Quoting Cumulus (Thread starter):
Do you have one? If so, is it worth the 60 quid a year?

I've got one of the pre-pay Virgin mastercards, which like you I use purely for online purchases. I understand the usual fee is a one-off £10, but Virgin very kindly sent me one for free as I also have a regular credit card with them.

Like you I only ever load a few hundered pounds at a time.

I'm led to believe that there are some limitations to it's use however. The documentation I reveived with the card indicated that it could not be used to book hotel rooms or to hire cars along with some other limitations (I think pay at pump fuel dispensers were also excluded).

Not entirely sure why, but since I always use my regular credit card for such things it makes no difference to me.
 
oly720man
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RE: Pre-Paid Mastercard. Do You Use One?

Thu Jul 17, 2008 3:07 pm



Quoting Gordonsmall (Reply 2):
Not entirely sure why

Probably because they are used upfront without knowing what the bill for the car, hotel or fuel is going to be and the limit could be exceeded.
 
jush
Posts: 1495
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RE: Pre-Paid Mastercard. Do You Use One?

Thu Jul 17, 2008 3:07 pm

Well in Germany it is a bit different with credit card. Almost noone has one. I have a complete free Visa Card with my Bank account which is nice. If you want to have a Mastercard you have to pay though. Anyway I don't even know where the difference is as everywhere I pay they accept VISA as well.

I remember that in England almost everyone has a credit card and you even use it to "transfer debts".
We don't do that over here and I reckon there is no such thing as a prepaid credit card here.
Still, I think it is a damn good idea although the price p.m. is way over the top.
20 a year would be the limit for me.

Regds
jush
 
gordonsmall
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RE: Pre-Paid Mastercard. Do You Use One?

Thu Jul 17, 2008 3:11 pm



Quoting Oly720man (Reply 3):
Probably because they are used upfront without knowing what the bill for the car, hotel or fuel is going to be and the limit could be exceeded.

That thought had occured to me, but then what it the difference to using a 'regular' credit card?

I could just as easily use a normal credit card which is only a few hundred pounds off it's limit, and presumably the payment would be accepted?
 
Illini_152
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RE: Pre-Paid Mastercard. Do You Use One?

Thu Jul 17, 2008 3:39 pm



Quoting Gordonsmall (Reply 5):
That thought had occured to me, but then what it the difference to using a 'regular' credit card?

I could just as easily use a normal credit card which is only a few hundred pounds off it's limit, and presumably the payment would be accepted?

When you rent a car or book a hotel room, they authorize MORE than the expected charge. You never notice this because the extra authorization is removed when you close out the bill. IE- rent a car for a week, normal cost $400, the rental agency will actually request $800 on your card, but not finalize the transaction. When you close out the bill, they will charge the final amount to your card, and you'll never know the difference.

This becomes an issue when debit cards are used, or the customer is close to their limit, as another transaction could put you over the limit, and with a debit card, they actually DO remove the money from your account, then credit it back. This usually takes longer, so its often advisable to secure a rental car with a credit card, then use you debit card to pay, if that is your desire.
 
oly720man
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RE: Pre-Paid Mastercard. Do You Use One?

Thu Jul 17, 2008 3:43 pm



Quoting Gordonsmall (Reply 5):
I could just as easily use a normal credit card which is only a few hundred pounds off it's limit, and presumably the payment would be accepted?

Would the transaction be approved if you were that close to the limit?

And having seen the tv program about car crime recently when hire cars ended up being shipped out of the country I expect prepay cards are just much less secure (for the seller) in payment for higher value items in that there is no credit history or bank account checking.
 
gordonsmall
Posts: 2106
Joined: Sun Jul 01, 2001 1:52 am

RE: Pre-Paid Mastercard. Do You Use One?

Thu Jul 17, 2008 3:47 pm



Quoting Illini_152 (Reply 6):
When you rent a car or book a hotel room, they authorize MORE than the expected charge.



Quoting Oly720man (Reply 7):
Would the transaction be approved if you were that close to the limit?

To be honest it's a VERY rare ocurrence that I book either a hotel or hire car using my own card, more often than not it's either booked using a company credit card or even better still paid for directly by the client!

I will have to examine my online banking next time I book a car/room however and see just how much it affects my available balance, just as an experiment.
 
Blackprojects
Posts: 527
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RE: Pre-Paid Mastercard. Do You Use One?

Thu Jul 17, 2008 3:56 pm

I have a Prime card.

It has allowed me to get onto Airnet which having a Chequerd credit history like others ment I wouldnt normaly be able to have a Mastercard.

It has allowed me to use ebay and to do so many things that i normaly wouldnt be able to do i rarely stick more than a ton on it at any one time as that lasts me a long time normaly.

 old 
 
Kunoichi
Posts: 743
Joined: Wed Jan 24, 2007 2:22 pm

RE: Pre-Paid Mastercard. Do You Use One?

Thu Jul 17, 2008 4:41 pm

Got one as well - though there's no running fee on my end.  cheerful 

Best thing I ever had... works like a regular mastercard, but no chances of spending more money than you have unless you make an agreement with the bank first... which is good if you don't manage funds very well (*cough*whichIdon't*cough*).

Heck, even if I DID have to pay a 60 quid running fee, I'd keep it. It's definitely worth it, IMO.  Smile
 
airtrainer
Posts: 1495
Joined: Sat Aug 30, 2003 11:44 pm

RE: Pre-Paid Mastercard. Do You Use One?

Thu Jul 17, 2008 7:47 pm

Never heard of that before but I think the concept is very interesting... I think I would certainly take one if this kind of card comes here in Belgium (in about 10 years or so  Big grin )
 
cumulus
Topic Author
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RE: Pre-Paid Mastercard. Do You Use One?

Thu Jul 17, 2008 9:24 pm



Quoting Gordonsmall (Reply 2):
'm led to believe that there are some limitations to it's use however. The documentation I reveived with the card indicated that it could not be used to book hotel rooms or to hire cars along with some other limitations (I think pay at pump fuel dispensers were also excluded).

Funny you should say that, as I just tried to hire a car with it through Avis online. It didn't want to know. Rang them and they said there is a restriction on hire cars, but they will lift that so I could book the car with it.

Also booked a hotel, and they "authorised" £100 which will be "unauthorised" when I pay the the hotel,unless of course I choose to pay with that card.

I've had it a week now, I have a conventional Mastercard, Visa and Amex (all credit) but I am rapidly leaning towards this thing.My Debit card is a Maestro, but a lot of places don't take that, more so online when buying abroad.

It is also dead easy to add funds to, either by BACS from online banking (did £100.00 Monday and it was credited by Tues PM) or also tried cash at the Post Office as a experiment and that also took just 24 hours. The limit is capped to 5 grand, but I woudn't do that for reasons outlined before.

You can also check your balance online or by sending a text, pretty cool I reckon!

www.mycashplus.co.uk
 
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OA260
Posts: 26182
Joined: Thu Nov 30, 2006 8:50 pm

RE: Pre-Paid Mastercard. Do You Use One?

Thu Jul 17, 2008 9:55 pm

Over here we have prepaid Visa card . www.3v.ie I find it good for buying things online and they cant take out more than you have so it actually cuts down on fraud. I only have small amounts topped up on it unless I make a large purchase in which case I top up and use it for a purchase within a few hours. No hidden charges and great way to manage your finances.
 
MaidensGator
Posts: 848
Joined: Fri Jan 12, 2007 12:02 pm

RE: Pre-Paid Mastercard. Do You Use One?

Thu Jul 17, 2008 10:42 pm



Quoting Cumulus (Thread starter):
I understand the running cost is five quid a month.

I wouldn't pay five bucks a YEAR to spend my own money...

Quoting Cumulus (Reply 12):
I've had it a week now, I have a conventional Mastercard, Visa and Amex (all credit) but I am rapidly leaning towards this thing.

Why not use one of them and pay it off every month?

Quoting Cumulus (Thread starter):
I got it solely for Internet purchases

A couple of my cards let me create a "virtual" credit card number for internet purchases. I can set the limit and use it only one time... Much more convenient than trying to refill a card...

It's really quite ingenious on the part of Mastercard. You are paying them five pounds a month for the privilege of lending money to them... Most people borrow from credit card companies; here, Mastercard is borrowing from you interest free...
 
oly720man
Posts: 5813
Joined: Fri May 21, 2004 7:13 am

RE: Pre-Paid Mastercard. Do You Use One?

Thu Jul 17, 2008 11:19 pm



Quoting OA260 (Reply 13):
Over here we have prepaid Visa card . www.3v.ie

I noticed the UK website for that, but was a little frustrated to see how they didn't give any information about the expiry date, other than that there was one. How long do the vouchers last for, a couple of months? 6 months?
 
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OA260
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RE: Pre-Paid Mastercard. Do You Use One?

Thu Jul 17, 2008 11:45 pm



Quoting Oly720man (Reply 15):
couple of months? 6 months?

I think its 3 months so you top up as you go so dont keep the amount on the card unless you are using it within 3 months.
 
cumulus
Topic Author
Posts: 1003
Joined: Wed Aug 23, 2006 4:39 pm

RE: Pre-Paid Mastercard. Do You Use One?

Fri Jul 18, 2008 6:49 am



Quoting MaidensGator (Reply 14):
I wouldn't pay five bucks a YEAR to spend my own money...

Bet you anything you like you pay your bank more than 5 bucks a year to spend your own money, bank charges etc.

I used my debit in France the other week (obviously a U.K bank account), I drew 500 Euro. Not only did they charge me £3.00 for the honor of drawing my own money abroad, but gave me rate of 1.16 Euro->Pound when it should be in the region of 1.21. They always get you in the end.

Quoting MaidensGator (Reply 14):
Why not use one of them and pay it off every month?

Removes the temptation, my Visa is good for £15,000 and I have weakness for the Apple Store! If it's not there, I can't spend it! It does give greater control without a doubt.

Quoting MaidensGator (Reply 14):
It's really quite ingenious on the part of Mastercard. You are paying them five pounds a month for the privilege of lending money to them... Most people borrow from credit card companies; here, Mastercard is borrowing from you interest free...

It's not Mastercard, the mechanism is. It's the banks, in this case Virgin (B.O.S), Bradford etc. You're a paying for a facility, just you like may pay a stupid rate to be overdrawn.

Quoting OA260 (Reply 16):
I think its 3 months so you top up as you go so dont keep the amount on the card unless you are using it within 3 months.

12 months!
 
MaidensGator
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Joined: Fri Jan 12, 2007 12:02 pm

RE: Pre-Paid Mastercard. Do You Use One?

Fri Jul 18, 2008 11:52 am



Quoting Cumulus (Reply 17):
Bet you anything you like you pay your bank more than 5 bucks a year to spend your own money, bank charges etc

I'd take that bet; I haven't paid a bank charge in more than twenty years...

Quoting Cumulus (Reply 17):
It's not Mastercard, the mechanism is. It's the banks, in this case Virgin (B.O.S), Bradford etc.

Either way, you're lending your money to the bank interest free, and paying for the privilege of doing so....
 
cumulus
Topic Author
Posts: 1003
Joined: Wed Aug 23, 2006 4:39 pm

RE: Pre-Paid Mastercard. Do You Use One?

Fri Jul 18, 2008 12:53 pm



Quoting MaidensGator (Reply 18):
Either way, you're lending your money to the bank interest free, and paying for the privilege of doing so....

And exactly what does your bank do with your money when you pay it in? If if they pay you interest, which is meagre, they will still lend it at a daft rate. Tantamount to the same thing.

Quoting MaidensGator (Reply 18):
I'd take that bet; I haven't paid a bank charge in more than twenty years...

You're argument is therefore your bank has not made one penny out of you, irrespective of bank charges or not? I seriously doubt that.
 
MaidensGator
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Joined: Fri Jan 12, 2007 12:02 pm

RE: Pre-Paid Mastercard. Do You Use One?

Fri Jul 18, 2008 2:26 pm



Quoting Cumulus (Reply 19):
Quoting MaidensGator (Reply 18):
Either way, you're lending your money to the bank interest free, and paying for the privilege of doing so....

And exactly what does your bank do with your money when you pay it in? If if they pay you interest, which is meagre, they will still lend it at a daft rate. Tantamount to the same thing.

It's not even close to the same thing. Here, you've stated you have a couple hundred on the prepaid. If you borrowed that amount on a charge card, and didn't pay it back for a year, they'd charge you interest. Even the most unconscionable banks only charge about 24%. You'd pay 48 in interest on your borrowed 200 in a year. But with the prepaid, you are lending the bank the money, plus giving them 60 a year. They're making 30 percent on YOUR money FROM you. Plus, they put YOUR 200 out at interest and make even more money. You'd be better off using the charge card and paying interest. Your OP did ask if it was worth the 60 quid a year, and the answer is a resounding no....

Quoting Cumulus (Reply 19):
Quoting MaidensGator (Reply 18):
I'd take that bet; I haven't paid a bank charge in more than twenty years...

You're argument is therefore your bank has not made one penny out of you, irrespective of bank charges or not? I seriously doubt that.

I never said they haven't made money off me; I said I don't pay any bank charges. I like to keep some money liquid for contingencies, so I have some of it in demand deposits. My bank gives me all the accounts completely free if I keep a minimum of 5K spread among the accounts. I have two personal checking, business checking, regular savings, and money market savings. They all pay interest, although you're right, it's meager, around two percent, but the money market has been paying between four and five percent. If I didn't have the minimum balance, they charge about $20 per month for a checking account, plus bill you to buy the checks. So in a year, for one checking account you pay $240 plus buying the checks if you have less than the minimum. If you put in five grand, you pay nothing and get the checks free. They even give me a lock box at no charge. I get around two percent interest, plus save the 4.8 percent bank fees meaning putting my five grand on one account is actually benefiting me 6.8 percent. Plus, I get three checking accounts for my five grand, which makes the effective benefit even better. Not enough to get rich by any means, but still better than paying $20 a month to write checks. There's truth to that old saying, "watch the pennies and the dollars take care of themselves..."  Cool
 
Pope
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Joined: Thu Mar 24, 2005 5:57 am

RE: Pre-Paid Mastercard. Do You Use One?

Fri Jul 18, 2008 9:21 pm

Quoting MaidensGator (Reply 20):
It's not even close to the same thing. Here, you've stated you have a couple hundred on the prepaid. If you borrowed that amount on a charge card, and didn't pay it back for a year, they'd charge you interest. Even the most unconscionable banks only charge about 24%. You'd pay 48 in interest on your borrowed 200 in a year. But with the prepaid, you are lending the bank the money, plus giving them 60 a year. They're making 30 percent on YOUR money FROM you. Plus, they put YOUR 200 out at interest and make even more money. You'd be better off using the charge card and paying interest. Your OP did ask if it was worth the 60 quid a year, and the answer is a resounding no....

That analysis is dead on.

Think of it this way. Interest represents both the time value of money and a risk premium the lender takes.

Here, when you deposit money into a prepaid account, you loose the time value of the money in your account and you reverse the risk premium. For YOU ARE PAYING SOMEONE ELSE when you are taking the risk that they won't pay you back.

Let me illustrate the danger in this in a very real world example. As many of you know, the company the Sharper Image recently went bankrupt. Anyone with a prepaid Sharper Image gift certificate stands to lose everything. A gift certificate is no different than a pre-paid credit card limited to use at just one store. Last I checked the Sharper Image wasn't redeeming the gift cards at face. They were giving user the option of using them at twice the amount (you had two spend twice as much on items as was on the card) or waiting to see if the bankruptcy court was going to honor this unsecured debt.

Prepaid are a great deal for the issuers and a horrible financial deal for the users.

[Edited 2008-07-18 14:33:47]
 
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OA260
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Joined: Thu Nov 30, 2006 8:50 pm

RE: Pre-Paid Mastercard. Do You Use One?

Fri Jul 18, 2008 9:41 pm



Quoting Cumulus (Reply 17):
12 months!

How long will my 3V Voucher last?
The expiry date for every 3V Voucher is set randomly for security reasons. 3V Vouchers are active for more than eight weeks and less than three months from the date of purchase. You can redeem the remaining funds on a 3V Voucher at any time by completing the online redemption form.

https://www.3v.ie/help.html?format=text#charges
 
max999
Posts: 1308
Joined: Fri Dec 09, 2005 11:05 am

RE: Pre-Paid Mastercard. Do You Use One?

Sun Jul 20, 2008 3:57 pm

Pre-paid credit cards are generally not advisable here in the US...they are usually marketed to the 'unbanked' market. Those are people who don't have access to the banking system in this country; they rely on things such as payday loans, income tax advance refund loans, and other services which take advantage of the consumer with high fees/interest rates.

For example, WalMart offers a prepaid Visa card that is full of fees. But a lot of those fees are waived if you do the card transactions at a store, such as putting money on your card. So essentially, the card is a trap for people to spend their money shopping at WalMart.

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