The prepaid card – control and flexibility

Today there’s lot of talk about the empowerment of people and their inclusion in the modern internet world. Unfortunately, great chunks of that world may be partly closed off to you if you don’t have some form of plastic payment card – and that’s where the prepaid card may be of interest to you.

Modern buying power

Few people dispute that shopping around is a good way to find the best bargains.

The internet is now a huge channel for the provision of goods and services and if you’re looking for those good deals, including the internet in your searching is typically a smart idea.

The trouble is, there’s no real point finding a great internet deal if the seller only takes credit or bank cards and you don’t have such a thing in your wallet or purse.

Then get a credit card!

This isn’t necessarily quite as simple as it sounds.

Firstly, you may feel a little uneasy about the prospect of carrying around what is, in effect, a portable loan in your pocket. The temptations there are well known!

Secondly, to qualify for a credit card you may have to meet certain employment and credit history criteria. If you do then fine but if you don’t, you may have hit a dead-end.

So is this the end of the story?

No – because the prepaid card may be the answer to your needs.

The prepaid credit card

This is a plastic card that works in the same way as a credit card and will allow you to, for example, pay for things over the internet and on the telephone.

The big difference is that you don’t have a credit limit – and you cannot run up debt. You simply load money onto your card through a bank transfer or via a PayPoint outlet and then it functions normally.

It’s also typically the case that there are no credit checks applied – you’re not borrowing money so they’re not required. This could be useful to you if you have been previously rejected for a credit card or bank card before meaning you can have all the flexibility of having plastic, no matter what your financial history is like.

This may open up the internet to you. It could help you to discover those great bargains without running the risk of slipping unintentionally into debt.

Of course, it’s not just about having the flexibility of buying online, the prepay card may also be used:

at many ATM’s;
abroad;
in shops, petrol stations etc;
by children as a way of controlling their spending;
in conjunction with an e-bank account, which some card providers offer as a related benefit.

This means that with a prepaid card typically you won’t have to carry as much cash around with you as well as have more control over your money.

Getting access to fast cash

Payday loans may be used to provide you with some fast cash should the need arise.

These loans can usually be used for anything you want. It doesn’t have to be an emergency, just something that possibly won’t wait until you next get paid. For example:
your washing machine breaks down
you have an emergency visit to your dentist and now have a large bill to pay
your car failed it’s MOT and it will cost a couple of hundred pounds to get it roadworthy
your child is going on a field trip and needs new clothing
that sofa you have been saving up for is half price for just a few days only

Are you eligible for a fast payday loan?

To be suitable for a payday loan, you will typically be aged over 18, in regular employment and have a bank account with a bank card.

Even if you have had credit problems in the past, you may still find that you may qualify for a payday loan. The amounts involved are typically smaller than for traditional loans so the risks to the lenders are reduced.

Where do you find fast cash lenders?

There are a number of payday loan companies on the internet and the whole application process can typically be completed very quickly.

You may be asked to provide some basic personal details including your employment and your bank account.

What happens then?

Once your application has been completed, a decision will be made very quickly. If your request is approved, the money may be paid into your account within a couple of hours or with some banks, the next day.

You can then use it as you choose.

On the agreed date, typically your next pay day, the full amount of the loan together with interest and any related charges will be debited to your account automatically.

Repeat borrowing

Once you have repaid your payday loan you are free to reapply for another as the need arises. Of course, reputable payday loan lenders will not lend to an individual on a very regular basis as this may be indicative of a debt problem.

The first time you apply for a payday loan you may find that the amount you are able to borrow is less than you perhaps asked for. On subsequent occasions though, once you have shown that you are a reliable borrower, you may find that the amount you can borrow increases.

In any event, the amount you ask for will typically need to be realistic in terms of your actual salary and your ability to pay it back.

Why wait? If you are eligible for a payday loan, getting your hands on some fast cash may be easier than you thought.

Making use of short period loans

If you borrow money, you may hear mention of long and short period loans.

This expression just relates to the length of time the loan is repaid over. This is also sometimes called the term of the loan.

A long period loan is typically one that is paid back over years – a mortgage or major house renovation loan may be good examples.

Short period loans are typically taken out for smaller amounts of money and repaid back over a period of a year or two – perhaps sometimes over just a few months. Possibly a furniture loan would be one such example.

Payday loans

For a long time, most borrowing fell into one or other of these categories – possibly supplemented by the bank overdraft for more variable requirements. Unfortunately, these loan products didn’t necessarily suit the needs of people who wanted a smaller loan just until they next got paid. That’s why the payday loan was developed.

The payday loan is a facility designed to offer you a fast loan paid directly into your bank account – a sort of cash advance on your next payday. When you next get paid, the lender simply debits your bank account to recover the loan plus their previously agreed charges.

Your debt is paid off and you don’t have to worry about ongoing repayments.

As the providers of the payday loan are typically not advancing very large sums for extended periods of time, they are able to make very fast decisions and usually entirely online. If the loan decision is positive, the money could be making its way towards your bank account within a few hours.

Poor credit history?

You may also benefit if you have some question marks on your credit history because the requirements of the payday loan providers may be less demanding than those of the conventional lenders.

As is the case with all lending, the costs of borrowing through a payday loan will vary depending upon the provider. The good news is that typically these loans are reasonably priced and may actually be more cost effective than some unauthorised bank overdrafts.

Cost-effective

For example and at the time of writing, if you wanted to borrow £125 until your next payday in two weeks’ time, using a payday loan from Speed-e-loans it would cost you £18.19 in interest plus a £4.95 bank transfer fee. (Do note that payday loans from other companies will attract different charges and the figures above should be used purely for illustration purposes of how a payday loan may be cost-effective, say when compared to an unauthorised bank overdraft).

The attraction of a payday advance is that it offers very short period loans that minimise your engagement in lengthy repayment periods. It’s borrowed and repaid very quickly. Once that’s done you can forget all about it – until you next need access to fast cash.