Online shopping: More secure with prepaid cards?

By UK CreditCards.com

The security of online banking and shopping has once again been the subject of considerable media interest over recent months. Last April, a breach of security at Sony's PlayStation network revealed the personal data of 77 million online accounts. The Daily Mirror reported that "video gamers' account data, including names, birth dates, email addresses and log-ins, was compromised after a criminal cyber attack on a Sony data centre in San Diego, California."

With online credit card fraud continuing to be a problem, some experts have urged consumers to consider prepaid credit cards as a more secure option for internet use.

Prepaid credit cards safer online?
Prepaid credit cards can be topped up with cash and then used in the same way as MasterCard and Visa credit cards, in stores, at ATMs or online. Unlike credit cards, however, only the cash loaded onto the card can be spent.

Kevin Harrington, Managing Director of the Global Prepaid Exchange, is one expert who advocates using prepaid cards online. "Hacking and security breaches seem to be getting more and more sophisticated," said Mr Harrington in an interview with Freshbusinessthinking.com. "And the Sony PlayStation situation is a good example ... While there is probably nothing gamers could have done to prevent the hackers accessing their details, they could have protected their finances by using a prepaid card instead of a credit card to make online transactions."

No way for fraudsters to run up huge card balance
Prepaid credit cards do not have a credit limit or an overdraft and so you never borrow' any money from the card provider. This means that a fraudster can only steal' the cash you have personally loaded onto the card.

"Prepaid cards are pre-loaded with a set amount," continued Mr Harrington. This "means hackers would only have access to the allocated funds rather than thousands of pounds worth of credit which is often available on credit cards"

See related: Sony customers face further credit card privacy woes; Why you should never reuse credit card PINs

Published: 2 June 2011