Now Everyone Can Have a Credit Card - Prepaid Credit Card
What is Prepaid Credit Card?
It is just like a prepaid phone, prepaid credit card works like a normal credit card – the difference is instead of buy-now-pay-later (spending future money), it is pay-now-buy-later (spending money you have). That means the prepaid credit card would only work if a cash money has been deposited in advanced. Since prepaid credit card is not a conventional “credit card”, therefore there are no approval criteria such as minimum income level etc. Prepaid credit card is also not a debit card – it does not need any saving account. Cardholders only need to top-up the money through the issued bank’s ATM machines or E-pay kiosks. Currently BNM capped the maximum card limit at any given time at RM10,000.
“Buying” a prepaid credit card
To get a prepaid credit card, one only need to register and activates the card that carries some fees. In short, you don’t apply for a prepaid credit card, you simply ‘buy’ it.
Who need a prepaid credit card?
Prepaid credit cards can be a convenient alternative to cash and for those who worry about credit card debts. Parents who financially supporting their home-away schooling children may also found it a good and convenient budgeting tool.
For banks, they are actively promoting the card to those who want to make on-line but are not qualify for a credit card. Think of air tickets, cinema tickets for example.
AmBank Next G Prepaid Master credit card
AmBank NexG prepaid credit cardAmBank NexG prepaid credit cardAmBank NexG prepaid credit card The only prepaid credit card in the market now. Ambank is aggressive pushing its NexG Master card via tie-ups such as Cathy Cineplex, colleges and even a direct-selling company. It claims have 10,000 prepaid credit cards in circulation since it launched during the 2006 FIFA Word Cup.
The initial charge of the card is RM25.00 (by purchasing the Starter Kit), after that, cardholders have to pay RM3.00 every month as a account maintenance fees (RM36.00/year). Card replacement is RM25. The NextG gard also carries a reward program - for every RM2.00 charged, one reward point will be awarded. Top-up can be done via AmBank counters, ATM, Am Assurance branches and E-payment kiosks starting from RM30 to RM500. Maximum top-up value at any given time is limited at RM10,000.
Coming soon: Tune Money’s Prepaid Visa credit card
Tune Money, the soon to be launched Malaysia 1st no-frills financial service company was recently granted the permission by BNM to offer prepaid credit card. It credit card partner is Visa. Operates like it parent company – Air Asia, Tune Money is reportedly will undercut AmBank’s charges by waiving the card activation fees, and planned to charge a much lower annual card maintenance fees. The card is expected to be launching very soon – probably July or August.
The Caveat of Prepaid Credit Card
Lost and stolen protections for prepaid cards are weak as compared to credit cards. For credit cards, there are rules stipulate cardholders liabilities and limits in the event of lost and stolen card. However, for the prepaid credit card, because funds are deducted quickly, there is not option to stop payment in a dispute and if cardholders reported late, banks would not bear any responsibilities on any money losses. If not careful, one would lose his entire fund in the card.
Bottom line
The pay-now-buy-later feature of the prepaid credit card comes in handy for those want to make on-line purchases buy worry about credit card fraud and scam. Here the risk is eliminated because you can load the required purchase amount only and make the purchase. The down side of it is there is an annual maintenance fee to be paid. And for parents, Prepaid credit card is a better option for their kids than supplement credit cards. Last by not least, prepaid credit card is also ideal for holidaying in oversea – it prevents you from incurring credit card debt or overspending, offers a cashless convenient alternative, and avoids credit card fraud.
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