Prepaid cards are slowing making their way into people’s lives across the world. These look like regular debit or credit cards but are functionally different from either of them.
As the name suggests, a prepaid card is a card issued by a bank or a financial institution which is preloaded with funds. This is a payment card and can be used like any debit or credit card. However, unlike a credit card, it doesn’t offer you credit and it is not directly linked to your banking accounts either [which is the case with debit cards]. Prepaid cards can be loaded with money by you or a third party and can be used up to the amount available. In short, when you use a prepaid card, there is no loan involved. You are spending the money that is already deposited with the bank or financial institution that has issued the card to you.
Let’s look at some of the basic features of a prepaid card:
- No credit approval required to avail this card.
- Almost immediate issuance of the card.
- It can be used everywhere a credit or debit card is being used.
- A cashless and debt-free option to transact.
- Funds can be reloaded online, through direct deposits and ATMs.
- ATM withdrawal option available.
- Some banks might charge a small fee to provide the service.
- Usually, there is a limit on the amount that can be loaded and withdrawn in a specific period.
- These cards have an expiry date too.
- Some banks offer loyalty points or rewards for transaction done using a prepaid card.
- They can be used as gift cards and also as travel cards when you travel abroad.
The only criteria to avail a prepaid card in UAE is that the applicant must be over 21 years of age. You don’t need any documents or even an account with the bank issuing the prepaid card. However, this must be checked with the individual bank before approaching them for a card.
Here is a quick look at the pros and cons of a prepaid card:
- Global acceptance being powered by VISA or MasterCard
- No credit scrutiny
- It’s not a loan hence no debt-worries
- Immediate issuance
- Possibility of earning reward points or a cash back
- Not linked to your account so purchase can be made only to the extent of the amount loaded
- Fees can be charged by the issuing institution for various services
- No interest on the money lying in the card’s account
- Transaction will be outright rejected if the it exceeds the amount available on the card
To bring things into perspective let’s draw a comparison between prepaid and credit cards:
|Interest to be paid
|Credit history scrutiny
||Usually ATM, POS and online
||ATM, POS and online
Consumers are increasingly getting debt averse and are looking for alternatives to make online payments without having to use their credit cards. Most banks and financial institutions in UAE have identified this need and offer prepaid cards to customers. Here are some prepaid card offers from banks and financial institutions in the UAE:
Majid Al Futtaim Finance Prepaid cards
Majid Al Futtaim offers different types of prepaid cards:
- MyNet card – is an online shopping prepaid card. You can load any amount between AED 100 and AED 3500 for a fee of AED 10.5. A virtual card is provided along with the physical card.
- VISA Gift card – is a prepaid card that can be used to shop in your country or abroad. A one time fee of AED 15.75 is charged for card activation.
- Design your own card – This is a personalized card where you can design the card with your own images. You can load any amount between AED 100 and AED 3500 for a fee of AED 26.25.
- Mall gift card – is a prepaid card that can be used at any of the Majid Al Futtaim City Centre Malls and Mall of the Emirates. You can load any amount between AED 100 and AED 3500 for a fee of AED 7.50.
- VOX Cinema gift card – is a prepaid card designed for movie-buffs. It covers standard, gold, max and 4dx seats. You can load any amount between AED 100 and AED 3500. There is no activation fee charged.
- Najm Load N Travel Card - Can lock in an currency exchange rate and avoid fluctuations during traveling abroad. Can load between AED 100 to AED 60,000. Activation fee of AED 45 is charged.
- Najm Load N Shop Card - Can use this card for shopping online and offline comfortably. Can load the card between AED 100 to AED 60,000. Activation fee of AED 35 is charged.
- Carrefour Prepaid Card - Can use the card at Carrefour and earn up to 3X MyClub points on the purchases made. Can load the card between AED 100 to AED 60,000. Activation fee of AED 35 is charged.
Apart from these, there are other prepaid cards from Najm that are exclusive to particular outlets like Chilli's, Yas Mall, Joy Alukkas, Dreamworks Spa, Jamaica, Jazz Lounge and Al Liali Jewellery.
RAKBANK Prepaid cards
RAKBANK offers two kinds of prepaid cards:
- Travel Prepaid Card - Single Currency – is a prepaid card maintained in Dirhams. You can load up to AED 50,000 on the card. Can get up to 5 add-on cards as well. One time fee of AED 10 is charged.
- Travel Prepaid Card - Dual Currency – is a prepaid card where your AED transactions are billed under the AED wallet and all other transactions are billed under the USD wallet. Can get up to 5 add-on cards and load each card up to AED 50,000. AED 10 is charged as one time fee for new card.
Emirates Islamic Bank Prepaid cards
Emirates Islamic Bank offers a Visa Platinum prepaid card:
- Emirates Islamic Visa Platinum prepaid card – is a prepaid card that can be used at various locations and avail several offers and discounts. Can maintain a maximum balance of AED 40,000 on the card. AED 25 is charged as a top-up fee for first time only if the card is loaded at a teller counter.
|Najm MyNet card||Najm VISA Gift card||Najm Design your own card||Najm Mall gift card||Najm VOX Cinema gift card||Najm Load N Travel Card||Najm Load N Shop Card||Najm Carrefour Prepaid Card||RAKBank Travel Prepaid Card - Single Currency||RAKBank Travel Prepaid Card - Dual Currency||Emirates Islamic Prepaid card|
|Maximum Balance on the Card||AED 3500||AED 3500||AED 3500||AED 3500||AED 3500||AED 60,000||AED 60,000||AED 60,000||AED 50,000||AED 50,000||AED 40,000|
|Card Activation Fee||AED 10.5||AED 15.75|
|AED 0||AED 45||AED 35||AED 35||AED 10||AED 10||Free |
|Validity of the Card||12 months||12 months||12 months||12 months||12 months||3 years||3 years ||3 years||2 years||2 years||NA|
⭐ Can I avail of a prepaid card if I am not on a job?
A. Prepaid cards are offered to people with basic documentation. You should not face any problem applying for a prepaid card. Do check with the concerned bank before applying.
⭐What is the validity period of a prepaid card?
A. It is usually 6 months - 5 years from the date of issuance. However, you can check with the issuing bank before availing the facility as this varies from card to card.
⭐ Is it mandatory to maintain a minimum balance in the card?
A. Yes. There is a minimum balance requirement on most of the prepaid cards. If there no minimum balance on the card, it will be considered inactive and a monthly inactivity fee will be charged.
⭐ Can we withdraw cash using the prepaid cards?
A. Yes. Prepaid cards can be used to withdraw cash at ATMs but a cash withdrawal fee will be charged.
⭐ What will be the cash withdrawal fee charged
A. Cash withdrawal fee varies with the card provider. If the cash is withdrawn at the same bank ATM, then there won't be any cash withdrawal fee charged.
⭐ What can we do if the card gets expired?
A. If your prepaid gets expired, you can get a new card or get the existing one renewed if the bank permits.
⭐ Can I transfer my balance from one prepaid card to another?
A. Yes. You can transfer balance from one prepaid card to another. A balance transfer fee will be charged.
⭐ Are all the prepaid cards reloadable?
A. Most of the prepaid cards are reloadable unless it is a gift card. You can check with the card provider before getting one.
⭐ Can I get my existing prepaid card replaced?
A. Yes. You can get your existing prepaid card replaced on paying a card replacement fee.
⭐ What happens if my card is inactive for so long?
A. If your prepaid card is inactive(no minimum balance) for more than a limited period, your card will be closed.
⭐ How do I check the transactions performed on the card?
A. You can get the details of your card which includes transactions history, balance on the card, and much more through phone banking, online banking, etc.
⭐ Are there any fees charged while adding money to the card?
A. No. Most of the card providers don't charge on adding money to your prepaid card.
⭐ What is balance unload fee?
A. Balance unload fee is a fee charged on a withdrawing the remaining balance on the card after closing the card.