The battle of prepaid credit cards: MasterCard vs Visa


There are a few different prepaid credit cards on the market, but the major battle is between the prepaid MasterCard and the prepaid Visa.

You might be wondering if it really matters which brand of prepaid credit card you choose, and the answer is, yes it does. There are different fees and charges, terms and conditions, acceptance rates, bonus products and more between providers.


Why a prepaid card? 
Prepaid credit cards are a relatively new product on the market. They offer most of the advantages of a normal credit card, without some of the major disadvantages. Some of the benefits to prepaid cards include not having to carry around large sums of money, which can be dangerous; having the convenience and speed of paying by card; and being able to set a spending limit in line with your budget.

There are also some disadvantages associated with prepaid credit cards, such as the fact that there are usually fees attached to setting up a prepaid card and perhaps monthly administration fees as well. There can even be fees for loading cash onto the card, but you can often escape this by loading the card by bank transfer.

One major advantage to prepaid cards is the ability to rebuild and improve your credit rating. For most, if not all of these cards, applicants will not have to undergo a credit check. Secondly, MasterCard can offer you the Credit Builder as a free additional extra to the Cashplus Gold. You are required to sign a 12-month loan agreement for a sum which totals £59.40 and can only be used to pay for the card fees. This sits on your credit record as upholding a credit agreement and will help increase your credit score.

Prepaid MasterCard vs Prepaid Visa: A battle over benefits
Here are four issues worth considering before signing up with a new prepaid credit card provider: 

1. Acceptance. MasterCard wins the battle of acceptance as it has the best prepaid card acceptance out of the top three brands, with more than 25m locations worldwide. Visa comes in second with 12m locations and Maestro in third.

2. Benefits. The first UK prepaid credit card on the market with attractive add-on benefits was the Cashplus Gold from MasterCard, and this card remains the only one to offer customers purchase protection and an optional Creditbuilder facility.

Prepaid MasterCards are also available with budgeting tools, free ATM withdrawals, free cash-back and other great benefits, depending on which card you apply for. Visa prepaid cards (of which there are currently only two on the market) do have some benefits for customers, such as the ability to pay wages directly on to the card and share cash via your mobile phone. However, MasterCard is able to provide customers with these benefits and many more rewards on top.

3. Fees. MasterCard is able to offer users much more flexibility with fees as there is a wider variety of cards available. Some prepaid credit cards come with fee-free reloads and UK cash advances, whereas others will come with no monthly fees. However, Visa is only able to offer free reloads at the Post Office with its Virgin Prepaid Visa Card, and its other cards are attached to some hefty charges for reloading and cash withdrawals.

4. Variety. MasterCard wins this battle too as there are more than 15 different types of prepaid MasterCards available, including cards to suit young people under the age of 18, ones dedicated to travelling and reloadable or non-reloadable cards.

See related: 5 questions to ask when comparing prepaid debit cards; Online shopping: More secure with prepaid cards? 

Published: 15 July 2011