Visa prepaid canada

7 Things You Need to Know About Visa Prepaid Card in Canada

visa prepaid card canada

Thinking about picking up a reloadable prepaid card? Here's what you should know first.

It is a well-known fact that having a credit card makes your life as a consumer much easier. Many businesses will only take a credit card as an initial form of payment, such as hotels and car rental companies. However, credit cards are not within reach for everybody. There are many reasons for not being able to be approved for a credit card but in the end, the result is the same. A diminished capacity to be able to engage in the marketplace.

So, what can be done about this problem? For all of those that find themselves in this situation, there is an easily available solution. Reloadable prepaid cards! These offer anyone the benefits of a credit card without needing to meet the qualifications of a credit card company’s approval process.

Reloadable prepaid cards are widely available in Canada and there are many different options to choose from. How do you know which is the best one for you? That depends on your situation. Before choosing a reloadable prepaid card, it is important to know what they do and what they don’t do. Make sure to look into these things so that you can know that you are choosing the card that is right for you.

Know These 7 Things Before Choosing a Visa Prepaid Card

1. Prepaid cards use your own money and not the banks

Reloadable prepaid cards are similar to credit cards in how they are used in the marketplace but different in one crucial aspect. You are using your own money and not the banks. That is why you don’t need to have a good credit score or credit history to get a prepaid card. You are loading and using your own money, similar to how a debit card works.

2. Prepaid cards do not impact your credit score

Since you are using your own money and not borrowing money from a lender, your credit score is not affected by using a prepaid card. This is the major difference between a prepaid card and a secured credit card.

If you are looking for something to build your credit, a prepaid card will not help you. A few exceptions exist and those cards offer a “credit-building program” (for a monthly fee) and will report your progress to a credit bureau, helping you build your credit.

3. Prepaid card fees vary wildly

It is critical that you do your research when it comes to the fees that are associated with a reloadable prepaid card. These fees vary wildly from card to card. Some cards have only a few fees and others have more. Sites like Hardbacon offer great online resources that can help you find the best prepaid credit cards in Canada.

The types of fees that you may find on a reloadable prepaid credit card are:

  • Transaction Fees
  • Monthly Fees
  • Reloading Fees
  • ATM Fees
  • Foreign Transaction Fees
  • Inactivity Fees
  • Etc

4. Prepaid card features vary even more

Just like regular credit cards, the reward programs on prepaid credit cards vary wildly. The type of card you use will determine the benefits and perks you get when using it for purchases.

Some cards will offer cashback on certain items. Other cards will have the ability to do pre-authorized online bill payments. Do you need a card that offers no ATM fees and guarantees the best exchange rates for foreign currency? You can find all of these options and more. Or you may end up using a card that offers no perks at all. This is why doing your research is key.

5. Prepaid cards can be a great budgeting tool

Budgeting for your monthly expenses can be a challenge for some people. Using a reloadable prepaid card, you can make budgeting your money as easy as spending your money. As an example, if you budget a certain amount of money every month for discretionary spending, putting that money on a prepaid card will ensure you don’t overspend.

It also protects you from dipping into the overdraft of your checking account, saving you from the charges that come with your overdraft. On the plus side, if you don’t spend all of your discretionary income on your card, it can roll over into the following month, giving you more incentive to avoid unnecessary spending.

6. Many cards have protection in place for your money

Have you ever felt that sense of dread when you realize that your card information may have been compromised? Whether if it is at a store that has had a security breach or if you simply lose your card, the thought that your finances may be compromised is never fun. This is where prepaid cards can be really beneficial.

Prepaid cards are loaded with a finite amount of money and they are not tied to a bank account or a credit bureau report. That means that even if someone managed to obtain your card and use it, the most that you could lose is the amount of money on the card. There is no way for a fraudster to access any other sensitive information.

Some cards also offer additional safeguards. New levels of protection have been put in place, making it easier to salvage the remainder of the balance on your card if it is stolen or lost. It is important to report any stolen or lost as soon as possible to engage these protections. Some card issuers will not honor a lost card as they consider it like losing cash. Be sure to check the fine print when getting your card to know where they stand on this issue.

7. No bank accounts? No problem

Many people in Canada are choosing to go without regular bank accounts. Prepaid credit cards are a great way of being able to be a part of the marketplace without having your money sitting in a bank.

Other people have banks accounts but don’t want to expose their bank accounts to any type of fraud or potential threat. Prepaid cards offer that peace of mind and security.

Why Would You Want a Visa Prepaid Card?

Everyone’s financial situation is unique and not all solutions apply to everyone. A prepaid card can be a great tool for many different reasons but it is important to know which is right for you. Take the time to look into the best prepaid credit cards in Canada and see which reloadable prepaid credit card is right for you.

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