To look at prepaid cards look just like normal credit and debit cards, they have a card number, magnetic strip and chip. You can use them like credit and debit cards to make purchases and withdraw cash. However, prepaid cards do have one major difference; as prepaid cards aren't linked to a bank account or credit facility there is absolutely no risk that you can go overdrawn or run up any debt as you can only spend the balance you have available.

When you purchase a pre paid card you will be given a pin number, and once you have credited your card, you can use it just as you would any regular credit or debit card – for shoping in the high street, on the internet or orders by telephone, as well as withdrawing money from the ATM.

You can load money onto your card in many places including the Post Office, at Paypoint and Payzone, bank transfers and even by cash at a bank. However, not all prepaid providers offer all of these loading options, so you need to look out for this when comparing deals as some are more options than others.

What are the benefits?

Prepaid cards are becoming an increasingly popular means of spending and for good reason. Some of the benefits they provide are:

No credit checks -
There are no credit checks carried out when you apply for a prepaid card and this makes them particularly suitable for individuals who have a poor credit history or find it difficult to get a regular debit or credit card elsewhere.

Convenience -
Prepaid cards both look and can be used like normal credit and debit cards which makes them a convenient means of spending both on and offline. What's more, many prepaid cards are backed by major payment service providers such as Visa and MasterCard and so can be used anywhere these payment methods are accepted both in the UK and overseas.

No credit facility -
Prepaid cards aren't linked to a bank account or credit facility so there is no risk that you will spend more money than you have available. This means that it's impossible to go overdrawn or run up large bills unlike more traditional spending cards. Once your card has run out of credit, you simply won't be able to make any more transactions until you top up.

Budgeting -
Because you can only spend the money you have loaded onto your prepaid card they are particularly useful if you need to stick to a budget. Most prepaid card providers offer online account management so you can keep an eye on your outstanding balance and purchase history too which makes keeping track of your finances simple.

Overseas spending -
Many prepaid cards allow you to make purchases and withdrawals both in the UK and overseas so they can be a convenient and more secure alternative to carrying foreign currency when you travel abroad. There are a number of specially designed prepaid travel cards available and these tend to offer very competitive rates for spending and withdrawing cash overseas.

For a full list of credit card providers please click here.

AA Credit Card	American Express	BT Credit Card	Capital One	Halifax
Egg Card	MBNA Europe	Sainsburys	Tesco Card	Virgin Money