The Prepaid Credit Card form is hardly common in the Netherlands, but this ‘new’ form of Credit Card offers many advantages, mainly for new users. Proof of income is not required and neither is a BKR assessment. What exactly is a Prepaid Credit Card?
The prepaid credit card
The Prepaid credit card is a credit card that you must top up before you can use it. It is accepted everywhere, just like a Visa or Mastercard, in shops, gas stations, restaurants and online shopping. You can also withdraw money from an ATM with this card. The card is great for everyday purchases, special occasions, and emergency backup. This actually differs very little from the normal credit card, the only big difference is that you cannot spend more than you have put on this card. So you set your own spending limit, determined by the amount of money on this card and you do not use it to borrow from the credit card company.
How does the prepaid credit card work?
Since it is a prepaid card, spending is limited by the amount of money you put on the card. If you make a purchase with the prepaid credit card, the purchase amount will be deducted from your available credit. You can easily and often top up the card via the internet when the money is running low. With most prepaid credit cards this is already possible via Ideal or via a regular bank transfer. In addition, the balance can often be checked via the internet.
What are the advantages of the prepaid credit card?
One of the major advantages of the Prepaid credit card is that it is safe and that it only contains money that you have put on it and that the card can be immediately blocked if it is lost or stolen. The card has a PIN code just like the regular credit card. In addition, this card is ideal if you have a negative BKR listing, as no BKR check is carried out. With a Prepaid credit card you don’t borrow anything and you can only spend money that you put on this card. Because most credit cards also require an income check and you must have a certain income to get a credit card, it is ideal for people who have too low an income. The final advantage is that with this card you have no monthly costs and often only a smaller annual contribution.
What are the disadvantages of the prepaid credit card?
The biggest disadvantage of the Prepaid Credit Card is that you only have access to the money that you have put on the credit card yourself. While you have the option to borrow with a normal credit card, this is not possible with this one and you will first have to save the entire amount you want to spend. Another disadvantage is that you cannot use most Prepaid Credit Cards at a car rental company. They use a credit card as security (deposit), but this is not possible with a prepaid credit card. It is often possible to reserve a car, but the card may be refused when picking up the car. Always contact the car rental company first.