Does a prepaid card affect your credit score?
If you want to borrow money from a creditor, you will need to ensure you have a good credit score. A credit score — or “credit rating” — is a score you are given based on how responsible you are as a borrower.
Before approving your application for credit, a lender will check your credit report using a credit reference agency like Equifax, Experian or TransUnion. This is so they can see how likely it is that you will pay back what you owe.
Your credit report contains a great deal of financial information about you, such as what you owe to other lenders and how many applications you’ve made for credit, as well as any late or missed payments.
The good news is that there are lots of things you can do to improve your credit score, which we’ll reveal later. First, though, we’ll focus on whether a prepaid card — like one of Getsby’s virtual prepaid cards — will have an impact on your credit rating. Keep reading to find out.
Prepaid cards do not have an impact on your credit score because when you spend on them, you are not borrowing money. Any money you borrow — be it a credit card, personal loan or mortgage — will show up on your credit report, and your credit score will go up or down accordingly.
However, prepaid cards like Getsby’s only let you spend the amount that’s been loaded onto the card — which means you are not borrowing money. Plus, as they are not linked to your bank account, your usage of them cannot be reported to credit bureaus like Equifax or Experian.
Many prepaid cards are advertised as “prepaid credit cards” or “prepaid debit cards”, which indicates that they can be used the same as traditional credit or debit cards. This means you can use them to make online purchases by entering the card details manually, or you can add them to your mobile wallet to make in-store purchases.
A Getsby prepaid card can be used anywhere you see the Mastercard symbol.
Here are some instances where you might pay using a prepaid card:
You can use a prepaid card to subscribe to services like Amazon Prime, Netflix, F1 TV OnlyFans, MYM Fans and Twitch. If you don’t have enough money on the card, subscriptions can’t be automatically renewed, meaning you have greater control over your recurring spending.
Similarly, you can pay your bills using a prepaid card, safe in the knowledge that your provider can’t take more than what’s been loaded onto the card. This is something they may try to do if there are hidden fees or there’s a billing error and you’ve been charged twice.
If you don’t have a debit or credit card, you can use a prepaid card to book a hotel.
A prepaid card can be used to make purchases on retail websites like Amazon and eBay.
You can use a prepaid card to spend on gaming transactions, such as on Playstation Plus, Xbox Live, Fortnite and EA Sports FC (FIFA).
A disposable prepaid card with money loaded onto it acts as a gift card that you can reward people with.
You can also take your prepaid card on holiday with you and use it like a travel card.
There are many circumstances when a prepaid card is a better option than a credit or debit card. Some of these are as follows:
Getsby prepaid virtual cards are safe to use due to the following security features:
Some additional safety measures you can take yourself include:
You can get physical prepaid cards from high street shops, supermarkets and banks, but virtual cards like Getsby’s can be applied for online.
Simply register for an account and choose which type of card you wish to apply for. There are no credit checks, so anyone can get one, as long as you are over 18 and a resident of the EEA, UK or EFTA.
Rather than receiving a plastic card in the post, you will receive an email within two minutes containing a 16-digit card number, expiry date and three-digit CVV number.
You can either top up the account balance of your reloadable card via bank transfer or credit or debit card or order additional disposable cards in your prepaid card account, which you will receive instantly.
Different prepaid cards have different conditions. For example, with Getsby’s reloadable green card, you can spend up to €9,000 per day or €30,000 per month, while the single-use black card lets you spend up to €2,500 per day or €30,000 per month across five cards (up to 50 cards per month).
With the Getsby Virtual Green Card, you can reduce your CO2 footprint and become carbon neutral within two years. This is because Getsby donates 0.2 per cent of your spending to Eden Reforestation Projects in Kenya and Indonesia. This means that for every €100 you spend, Getsby will plant one tree.
If you have a low or non-existent credit score and you want to borrow money, you will need to build your credit score to prove to lenders that you are a trustworthy borrower. The good news is that there are many ways you can try to do this. Here are some suggestions:
If you want to borrow money from a creditor, you will need to ensure you have a good credit score. There are many things you can do to improve your credit score. However, prepaid cards do not have an impact because your usage of them is not reported to credit reference agencies.
When you apply for a prepaid card, your credit score is not taken into account, which makes them ideal for those who are unable to get a credit card or open a bank account, want help with budgeting, or wish to manage their child’s or an employee’s spending.
If you do want to improve your credit score, rather than getting a prepaid card, you can try the following: