The prepaid credit card has been gaining popularity lately. The postal company ConPost Credit has sold 350,000 such cards since its launch at the beginning of 2012, of which more than 265,000 are still being actively used. The prepaid card is also a success at Belfius, with around 150,000 customers using it.
Hundreds of thousands of copies in circulation
Now that there are hundreds of thousands of these prepaid credit cards in circulation, it is of course important to compare the pros and cons with each other. Why do young people use this and is it without risk? Or is it really important to pay close attention to the costs?
No risk of going red
The big advantage of prepaid cards is that there is no risk of going red. Unlike with a regular credit card, a certain amount must first be made available with a prepaid card. The user of the card then has the option to make payments up to the amount that has been transferred in advance. It is not possible to purchase items on credit, so no (expensive) loan can follow from this. In that respect it is a debit card, in the form of a credit card.
The advantage of this is that young people, among others, have the option to pay in places where only a credit card is accepted. On the other hand, they do not have to take out credit for this and do not run the risk of high costs.
Withdrawal costs money
Are there any disadvantages to the prepaid credit card? A cash withdrawal is generally not free. This entails a major disadvantage compared to the regular bank card. In that regard it is important to use the prepaid card in a sensible way and only use it where one does not, for example, accept a bank card.
In that regard, the prepaid card can offer a solution in a number of situations, but it is not a fully-fledged alternative to the bank card. In addition, a regular credit card brings more payment convenience and offers the possibility to borrow money. In that respect, the prepaid credit card seems to appeal to a niche, even though, for example, young people are relatively large.