Exploring the benefits of prepaid cards
April 25, 2025
Prepaid cards are a popular alternative to credit and debit cards.
They’re especially suited to people who can’t access traditional banking solutions because of poor credit. However, prepaid cards often offer plenty of other advantages too.
In this article, we’ll take a look through those advantages and explore how you can choose the right prepaid card to get the best bonuses and rewards.
What is a prepaid card?
In simple terms, a prepaid card is a payment card that you load up with money before use. Unlike a normal debit or credit card, they aren’t linked to a traditional bank account and usually, you can’t access credit through them.
Prepaid cards are simple to use and you can spend with them just like you would a regular debit card. That includes transferring money, making payments in-store or online, using Apple and Google Pay and withdrawing cash from ATMs.
What are the advantages of prepaid cards?
Prepaid cards come with numerous advantages over old-fashioned basic accounts. Here we explore those.
No credit checks are required
Prepaid cards are much more accessible than traditional bank cards as they don’t require a credit check. This makes them perfect for people with poor credit history or even those building their credit from scratch such as new arrivals to the UK. Unlike credit cards, prepaid cards also can’t impact your credit score negatively.
Easy to obtain and use
Getting a prepaid card is generally straightforward and requires less documentation than opening a bank account. That means you can set up a prepaid card entirely online and get a UK account number and ‘bank’ details in just a few minutes.
For example, with Pockit you can apply for your prepaid Mastercard® in as little as 3 minutes with proof of address and a birth certificate or over a dozen forms of ID that are not accepted by many online banks. Then you can start spending online immediately with a virtual card that connects to Apple Pay and Google Pay™.
Financial inclusion
The Financial Conduct Authority estimates that around 1.1 Million adults in the UK don’t have a bank. But an amazing benefit of prepaid cards is they offer an accessible banking solution for people who are unable to get a traditional bank account or access financial services.
Budgeting and spending control
Easy access to an account to manage money, pay bills, and view balance alerts is one of the main advantages of prepaid cards. They’re perfect for people looking for a practical tool for budgeting and controlling expenses because you can only spend the amount loaded onto the card and you can budget from there.
Rewards and benefits
Prepaid cards often come with fantastic features like exclusive discounts and cashback. For instance, with Pockit you can get up to 15% cashback from leading retailers like Argos, Pizza Express, and Sainsbury’s, as well as better deals on broadband, TV, and mobile contracts. You can also get paid a day early for free.
Better for joint accounts
Setting up a joint account can be time-consuming and complex. It also financially links both parties, meaning if you get a joint account with somebody who has bad credit, your credit score could suffer too.
Prepaid cards are an easy alternative for people like couples, parents, and carers to set up multiple users on one account. This is also one of the major benefits of prepaid cards for businesses as company spending cards can be set up for multiple staff.
Ideal for travel
One of the benefits of prepaid cards on holiday is they allow you to load a specific amount of money on the card instead of carrying large amounts of cash. Many prepaid cards for travel come with great exchange rates too.
Disadvantages of Prepaid Cards
While there are plenty of benefits of prepaid cards, nothing is perfect. Here are some of the disadvantages associated with prepaid cards:
Limited funds
Since prepaid cards are loaded with a specific amount of money, they might not be ideal for large or unexpected expenses. It’s important when using a prepaid card to always ensure you have enough money loaded for your intended spending or upcoming direct debits.
Lack of credit facilities
While prepaid cards are great for helping to manage your money, they don’t traditionally come with credit facilities. This means you can’t build your credit score or take out loans.
Pockit offers a solution to this problem, however. The ‘Fast Track to Credit’ tier of Pockit’s prepaid card costs just £9.99 per month and builds your credit rating by reporting your payments to Credit Reference Agencies. You can get access to personal credit in as little as 3 months.
Choosing a prepaid card
Consider the following factors when shopping around to find the right prepaid cards for your needs.
Fee structure
Ensure you choose a prepaid card with transparent fees so you understand exactly what you’re paying for and when. Compare the fees associated with each provider to find a structure that works for you and ensure there are no ‘hidden’ costs.
Security features
Choose a card that provides robust security features that will ensure your money is safe. In particular, look out for 3-D Secure for protection of online transactions and Two-Factor Authentication (2FA) to secure your account logins.
Load methods
Look into the load methods of each prepaid card and ensure they align with how you’ll use the card. Common load methods include bank transfers, salary payments, direct deposits, and cash loads at PayPoint stores. Pockit offers all these methods.
More than just a prepaid card
As we’ve explored, prepaid cards give people with low and poor credit an easy way to budget and manage their money. But they can also provide so much more…
With Pockit, you can set up an account in minutes and then get access to amazing benefits like our credit builder, cashback and rewards and the ability to get paid early.
