Student Guide: Prepaid cards

Starting at university this year? Daunted by the idea of having to cook, clean and budget for yourself? Well Mastercard can help you take care of at least one of those things with a prepaid card.

It’s never easy trying to work out how to manage your money when you first move out of the parental bosom into the grown up world of rent and working how to divide your money between food and alcohol. Fortunately there are options available to make it a little easy.

A prepaid card is very different to a regular credit or debit card, instead of gradually building up a huge debt or overdraft over time you prepay a fixed amount onto your card, whether for a month or a year on your card and gradually wear down the sum.

Think of it kind of like a pay as you go mobile. You top up with a certain sum at the start of every month and you run it down like credit. As there is a finite amount you are naturally more careful with it and it makes it easier to stay within a certain budget.

With a prepaid card, such as the Mastercard available from Secure Trust Bank you can’t run up a huge debt at the end of month.

Mastercard’s prepaid cards are accepted nearly everywhere; both here and abroad. You can even pay bills with them if you don’t have access to a debit card and don’t want to send a cheque in the post.

There are other advantages to having a prepaid card over a regular debit card other than money saving. They offer you more protection against fraud or identity theft as they are not tied to any particular bank account. If you purchase anything online you have less to worry about; they can’t take out loans or rake up huge debts in your name.

They will probably save you money on charges in the long run as well. Although there are a few charges associated with setting up your account and letting it fall into inactivity you can save a fortune when you finally go on that trip you’ve been looking forward to during the summer holidays.

If you should happen to get stranded in an Eastern European city with a hard to pronounce name and a not a single penny in cash then you won’t be hit up for a fortune in foreign transaction fees. Provided you’ve prepaid the country’s currency on your credit there are no charges on using it outside your home country. It can therefore be much safer and easier than traveller’s cheques. However, it is important to remember that you still can’t cross-currencies free of charge, for example you can’t use a prepaid card with sterling on to pay in euros. Then the normal currency rates apply in line with what they would charge on a debit or credit card used abroad.

A prepaid card is perhaps an overlooked alternative to the traditional and potentially hazardous debit or credit schemes. As a student is always living on a tight, fairly inflexible budget it is good to know that they have flexible options to help them manage their money a little better. A prepaid card, especially from a worldwide brand like Mastercard, is a guarantee of security, stability and protection for your money to make it go further and ensure that there is still plenty left over at the end of the month for party!

 

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