Prepaid

The prepaid concept refers to a product or a service that has been paid for in advance. It is often used for mobile phones or call cards and store cards. Prepaid credit cards are also available. Generally, the prepaid concept works on the principle that a certain amount is paid in before the service can be used. Once the money has been used up, some more money has to be paid before it can be used again.

Rate variety

In the case of mobile phones, a prepaid card is usually bought, which is linked to the mobile phone account. Once money is paid in, i.e. the phone has been topped up, it is possible to make and receive calls. Rates vary from one mobile phone provider to another, so it is always a good idea to compare rates before committing to a particular phone provider. Some offer good rates for people who send text messages frequently, whereas calls are expensive to make, others offer cheap calls with expensive text message rates. Once the credit has been used up, it is usually still possible to receive calls and texts, but in order to be able to make calls and text, it is necessary to top the mobile up with some more credit.

Prepaid cards are also available for landline phones, and are often used abroad to get cheaper call rates. Normally, a toll free number is rung, and via that number users can connect to the service offered via the prepaid phone card. Like with the mobile prepaid cards, this service can be used as long as there is credit left on the card.

Necessary evil

Prepaid credit cards are available for minors or people who are not able to have a credit card, for example due to a bad credit rating. Nowadays it is difficult to buy goods on the internet without owning a credit card or debit card, so these cards can be very useful. They work on the same principle as other prepaid cards. A certain amount of money is paid to be used with the card, and the card owner can then shop normally with this card as if it were a credit card, until the credit has been used up.

Prepaid is an ideal way to control spending and still be able to use services like mobile phones and credit cards.