In addition to the conventional credit card, which is problematic for quite a few when it comes to handling money, there is also an alternative credit card, namely the so-called prepaid credit card. But what exactly is this about, what about the connection to your own account and how does it compare to the norm?
Not really a credit card
If you take it seriously, the prepaid credit card is not actually a credit card. Why this is so can be explained quickly. As the name suggests, a credit card is a payment on credit. So you take out a certain loan when you pay with the card when shopping. At the end of the month, all expenses are settled, which must be paid by the user. Prepaid cards work the other way around. You have to top up your credit in advance.
If you then pay with the card, the amount paid is written off from the available credit. So if you take it very seriously, a prepaid credit card is not a real credit card for this very reason.
The amount paid is written off from the available credit
So if you take it very seriously, a prepaid credit card is not a real credit card for this very reason.
Many advantages and better cost control on the one hand comes with some disadvantages. It is not uncommon for the fees to be significantly higher, both when charging and when paying with the card. How the different advantages and disadvantages weigh depends on the respective situation and the financial situation of the people who want to use prepaid credit cards. Otherwise, all regulations and obligations apply that also exist with conventional credit cards. Both minors and people who are in debt and have noted this via a negative Schufa entry usually do not receive a credit card.
If you are interested in getting a credit card, whether normal or prepaid, the best thing to do is contact your own bank and get advice. Indeed, there are different costs and obligations that the customer should consider in order to save as much as possible on additional fees. However, one thing is certain: If you use a prepaid credit card, you never run the risk of spending more money than is actually available. If the credit on the card is exhausted, you can no longer pay with it and this cost control is in many cases quite pleasant.