A prepaid credit card is a type of credit card that allows the user to load money onto the card in advance. This means that the card can be used like a normal credit card, but without the need for a line of credit or borrowing from a lender. Instead, the user pays for their purchases in advance, using their own money.
There are many reasons why someone might choose to use a prepaid credit card. For example, they may not have good enough credit to qualify for a traditional credit card, or they may want to avoid debt and interest charges. Prepaid cards can also be useful for budgeting purposes, as they help you limit your spending to the amount of money you have loaded onto the card.
How Prepaid Credit Cards Work
Using a prepaid credit card is generally very similar to using a normal credit card. You can use them anywhere that accepts major credit cards (such as Visa or Mastercard), and you can use them both online and offline. When making a purchase, you will simply need to provide your 16-digit card number and expiry date; no further verification is usually required. In some cases, you may also be asked for your 3-digit security code (located on the back of most cards).
Once you have made your purchase, the funds will be deducted from your balance immediately. If there are insufficient funds available on the card at the time of purchase, then the transaction will simply be declined. It’s important to keep track of your balance so that you don’t accidentally overdraft; most prepaid cards charge fees for this kind of mistake.
One thing to note is that prepaid cards are not typically connected to bank accounts like debit cards are – instead, they function more like “credit cards in reverse”. This means that if you lose your card or it is stolen, any money loaded onto it will likely be gone forever unless you have purchased insurance specifically for this purpose (which is not always offered). For this reason, it’s important only to load as much money onto your prepaid credit card as you feel comfortable losing – never more than what you could reasonably afford to part with permanently
The List Of Best Prepaid Credit Cards In Canada
Prepaid credit cards can be used by anyone who wants to have a convenient way to pay for purchases without having to carry around cash or write checks. They are also a good option for people who do not have a regular income or for those who want to control their spending.
There are a lot of different prepaid credit cards on the market, so it can be hard to know which one is right for you. Here is a list of the best prepaid credit cards in Canada:
CIBC AC CONVERSION™ VISA PREPAID CARD
The AC Conversion Prepaid Card is one of the most popular prepaid credit cards in Canada. It has no annual fee and offers a great cash back (1%!) on purchases. You can also use it to withdraw cash from ATMs.
KOHO Reloadable Prepaid Mastercard
The KOHO Reloadable Prepaid Mastercard is another great choice for a prepaid credit card. It has 1% cash back, no annual fee and allows you to use their app. You can also get up to 5% cashback on certain partner products they offer.
BMO Prepaid Mastercard
The BMO Prepaid Mastercard is a good option for those who want a little more than just a prepaid credit card. It comes with many perks, such as extended warranty and purchase protection and the ability to withdraw from ATMs. There is a small annual fee of $6.95, but it’s worth it if you want all the bells and whistles that come with this card.
The American Express Prepaid Card
The American Express Prepaid Card is another great choice for a prepaid credit card. It has no annual fee and it can be bought by American Express points from a family member or employer. It is available in the following denominations: $25, $50, $100, $200, $500 and $1000.
