If you think of a virtual purse, the prepaid or reloadable card works in a similar way, like a purse where you can put money and spend it later.
They are safe and easy-to-use tools and do not require the opening of a current account, allowing greater monitoring of the expenses incurred, as well as protecting the safety of online purchases.
The procedure used to make a payment is very similar to that used by ATM cards: the shopkeeper inserts the card into the appropriate reader and the customer enters the password to complete the purchase.
A prepaid card can be useful for everyone, even for those who already have a credit card or perhaps have a structured and complete current account. However, the costs are very low and the convenience that such a card can offer you is really important.
What is a prepaid card?
A prepaid card is an electronic payment card, with a 16-digit number just like credit cards.
The prepaid card, however, does not have a connected current account, but has a “deposit”, generally with limitations on the ceilings, from which you go to draw every time you pay, precisely, with the card.
From the point of view of payments, the prepaid card is practically identical to the credit card: the difference is that the prepaid card uses money that is reloaded at an earlier time, while the credit card, in fact, uses a credit line. that the bank has opened and linked to the card itself. If the prepaid card has no credit loaded, or in any case not sufficient to cover the desired purchase amount, it will be rejected.
The operating system behind the prepaid card is one of the simplest: you load money and you have that sum available for use through the card itself, or to pay in stores or online or to withdraw money from ATMs.
The prepaid card circuits:
Prepaid cards are issued either in the VISA circuit (or even Visa Electron, which is a sub-division of the former) or by the Mastercard circuits.
This is a huge advantage, as these two circuits are among the most accepted in the world and allow you to pay practically in every commercial activity, both in Italy and abroad, and also to withdraw at any ATM.
There are, at least in Italy, no other circuits that issue this type of card.
Who can ask for it?
To obtain a prepaid card it is not necessary to have special requirements. For this reason, it is particularly suitable for those who have difficulty accessing bank credit, such as young people or atypical workers. The age of majority is not required: it can also be purchased by minors, as long as a parent acts as guarantor.
How much?
Depending on the lender you select, the costs of a prepaid card can vary. Generally, an activation fee must be incurred, by making a top-up of a minimum amount established by the bank immediately afterward.
Prepaid cards tend to be very cheap. Monthly usage fees are hardly required, with small expenses for recharging (usually 1 euro) and for withdrawing the money.
Types of prepaid cards:
- Rechargeable prepaid cards (also known as nominative ) can be used when needed, by reloading money either through your current account, at the counters of the credit institution that provided the card, or at authorized betting shops. The example par excellence of this type is the PayPal card, which allows you to use the credit previously reloaded for purchases at all stores affiliated with the MasterCard circuit.
- Disposable prepaid cards (also known as bearer cards) contain, at the time of purchase, a limited credit, which can be used until exhaustion. These are the so-called gift cards, which however have the limit of being able to be used only at the issuer, i.e. only at the store that issued them, such as book stores, supermarkets, clothing stores, or to be used only at the service for which have been turned on, for example, Sky, Media set Premium or Telepass.
- The contactless prepaid Mastercard cards are passes for public transport that replace the classic paper receipt. When getting on the bus or on the subway, the card is brought close to an optical reader capable of recognizing the route and the relative amount requested, allowing access to the turnstiles.
- The prepaid cards with IBAN or account cards are so-called because, in essence, they offer all the main services of a current account: they are, in fact, equipped with an IBAN and allow the crediting of salary, pension, domiciliation of utilities. Furthermore, they allow you to access internet banking services to make phone top-ups or online transfers, directly and comfortably from home or with a mobile phone, with practically no costs, if compared to those of a traditional current account. The current account is obviously a more structured product, that is a product that allows you to go to work with bank transfers, with payments also at the counter, to pay F24, and to activate bank direct debit on the account in question.
Prepaid card: advantages and disadvantages
The fact that these cards are not linked to a current account makes it easier to manage any loss or theft, the damages are limited to the amount present on the card at that time.
Being linked to the major payment circuits, they can be used all over the world, always guaranteeing an anonymous purchase, generally by entering the user and password chosen by the owner, but not other sensitive data.
Furthermore, in the event that you need money currently not available on paper, anyone can make a payment in your favor without any difficulty, from any part of the world and at any time.
However, there is a downside, the top-up costs become quite expensive if you need to use the card frequently, both for purchases and for withdrawing cash.
Furthermore, every time you want to make a purchase, you need to check that you actually have the necessary credit available.
Clearly, credit institutions must protect themselves and this means that when fraud or errors such as double charges occur, for example, the verification and reimbursement times are longer than those required for traditional credit cards.
Before closing a current account and therefore switching to the prepaid card solution, it is good to think about what you do every day with your current account, what are the functions that you actually use, as well as the functions that you might need a second time.
