Credit, debit and prepaid cards

If you've ever thought about getting one of these types of cards and you're not sure which one is best for you, this post will help you understand the differences between them and which option best suits your lifestyle. 

Credit card

A credit card is a type of payment card that allows the cardholder to buy goods and services on credit and pay them back in instalments. Credit cards are also often used to make major purchases or to travel abroad as they are an accepted method of payment.Most credit cards also offer reward programmes such as cashback, miles or points to attract and reward customers.

Credit cards are super convenient as you can use them to make purchases and payments even if you don't have enough cash. However, high interest rates can apply if you don't pay off your credit card debt on time.

Debit card

A debit card is a type of bank card that requests money from the cardholder's bank account instead of credit when the cardholder pays with the card. Most debit cards are linked to a bank account or current account and allow you to withdraw money from your account or use it to make purchases.

Unlike a credit card, with a debit card you can only spend the money you have in your bank account. You don't have to pay interest because you can only spend what you have in your account.

Prepaid credit card

A prepaid credit card is not - like a standard credit card - linked to a bank account. A prepaid card is a type of credit card where the cardholder loads the card with a credit balance before using it. Once the limit is reached, the card is declined until further deposits are made to the account.

Prepaid cards are offered by all major credit card providers, especially Mastercard and VISA.

A prepaid card is super convenient because you can make purchases and payments with it and it is a safe alternative to cash. It also allows you to plan your spending in advance and provides some financial security as you can only use the credit you have loaded.

Credit, debit and prepaid cards all have their specific advantages and disadvantages. Credit cards offer the advantage that you have time to pay your bills, but there are also high interest rates if you don't pay your debts on time. Debit cards prevent debt and there is no interest, but the disadvantage is that you must always have money in your account. Prepaid cards are a safe method as there is no way to spend more money than is available on the card.

With all three types of cards, you should make sure that they are issued by trustworthy companies and that all necessary security measures are taken to avoid fraud.

Our recommendation: The king+ Prepaid Mastercard