UK prepaid "credit" cards?

It's a debit card. Apparently issued by a UK firm, but insuffiicent info given to judge their reliability, etc. When BCCI went under, VISA honored their outstanding travellers cheques. Would they do the same here with a debit card? I doubt it.

You can do better elsewhere. For example, Nationwide's VISA Delta debit card is said to charge zero load on currency exchange, and you can spend whatever you have in the bank. It doesn't offer credit (Nationwide have a credit card for that). On the other hand, if you have a really bad credit history, you may be blacklisted by banks and then a credit union, or even a Providian dollar card (if you can manage a US address) might work.

The issue arises from time to time, not just for hire cars but for getting a Vonage telephone (vonage.com -- neat, having both a UK and a USA telephone number on the same broadband Internet VoIP phone, but you need a US credit card and nominal address to get one. It was mentioned in The Economist a few weeks ago how many Indian mothers have them so they can talk at local rates or free to their kids in Southern Calif.)

Steve writed in news:jli5t09bsb9pqscp07urnl3bujikoqrbtc@

4ax.com:

Would the Beneficial Bank visa card, which you can run as though it were a current account fit the bill. It's not truly prepaid, but you don't have to have a credit limit on it either?

In the USA, where there is no impediment to discharged Ch. 7 (Ch. 13, payment over time sort of like an IVA is different) bankrupts having bank accounts and credit, if they can get it (which they usually can; in the UK discharged bankrupts can too, but discharge takes much longer).

There are numerous scams and some legitimate outfits that offer credit to such persons, and also to high-risk borrowers. Interest rates tend to be exorbitant, and penalties for late payment and over-limit purchases (including penalties!) even more so. Many of the scammers are subsidiaries of major banks.

A few legitimate operators are out there; but the discipline required to keep within the rules and avoid penalties is too much for some.

Yet, if it can be managed, having a low-limit credit card or even a "secured" card (secured by a savings account) is worthwhile for the reasons given: hiring a car (impossible with major firms without a credit card), and "building up credit".

To get back to "normal" creditworthiness with bankruptcy on one's record takes ten years. But after two or three years, you can get credit, and even a mortgage, from mainstream lenders. In the UK I think non-status mortgages may be available. I don't know much about credit cards for such persons, and my Web search was no more successful than those of the others.

But as Chris asked - just *how* does a *pre-paid* card, "build-up credit" - when no credit is being offered or obtained??

Perhaps there is an inconsistency of definition. However, I am speaking of "secured credit cards" not "gift cards" or refillable cash (debit) cards. The only reason for a secured credit card, given the relatively high fees (and penalty charges if you mess up) is that they are reported faithfully to the credit bureaux. Even though there is no credit risk, the discipline of regular payment has value to potential (bottom-feeding and other) lenders.

The use of credit scores to mechanise lending has screwed everything up. You no longer (unless you deal with a private banker, which already means you are a reliable customer) know your bank manager. Even store cards, pitiful as they are, help with that.

I don't know about Britain simply because I haven't seen them promoted here. But I know that secured credit cards are common enough in North America. The fact that you had to ask may mean they don't exist in Britain. I note that Kelkoo includes them among key words (to get hits) but not among offers:

Typically in the US someone with horrendous credit will pay upwards of $100 for a secured credit card, not including the few hundred dollars deposit. But at least then s/he can hire a car from one of the majors -- and use a debit card for actually paying for everything. Of course the issuer probably blocks the security for long periods when a retailer seeks interim "approval"...

Upon further searching I found this:

A secured credit cards are not widespread in the UK. Generally sought after by people with people as a means to get credit when they have a poor credit history. "Click here for more advice on bad credit history."

I think that's all I have to say. You can all Google yourselves to more knowledge than I have on this. I do bankruptcy, not credit...

Um, good point. AIUI this really is one of the reasons such cards exist in the US, I (too, now,) wonder how it works

tim

you acquire a history with the company ie topping up the credit and responding to any correspondance. Moves you on from being a non-entity "Mr X has had our prepaid card for 18 months and used it frequently and never tried to exceed the available credit"

Phil

I'm still skeptical, but if these cards really can improve your credit rating then perhaps a pre-paid mobile phone account could do the same,

Chris

the latter is not from a financial institution and can be completely unconnected from an individual or an address so I don't see that helping.

Phil