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'Prepaid' credit cards, finally!

Kelvin Yong writes that gift vouchers, in the form of a prepaid Visa card, will soon be available from New Zealand Post under the name 'Prezzy Card'. So it's not really a credit card per se in terms of getting a credit line, but given for some people the difficulty of getting a credit card, it might become useful -- it's apparently to be accepted in most places as per a 'regular' Visa credit card.

At least it appears, according to the FAQ, that one won't need to buy it online, which would probably need a 'real' credit card in turn. Phew.

It's a pity that it is specifically not reloadable (as per the fine print), thereby requiring effectively their $5 activation charge for a new card every time one's card is finished. For someone forced to use it for every day transacting, it'd start getting rather expensive, unless they were able to load a large amount of money each time. (Assuming the $500 maximum loading on a card, that $5 each time, the loss of interest on the blocks of $500, one's actual ability to stump up with $500 at a time each time, once one reaches about 3 or 4 cards, one might as well try really hard for getting a 'real' credit card -- credit card annual fees are as little as $15 a year or $18 a year to $25 a year, or $35 with rewards points, if one likes those.)

Not only does just that stop me from getting one for more than just amusement value -- the product's expiry date is just (at least) a year, and there's a 3.5% foreign currency transaction fee, when most banks are around the realm of 1.75% (half that of this card's rate!), 1.85%, 2%, 2.1% 2.25% 2.5% or 2.5%, as far as I recall. On the other hand, it might be worth considering getting one for higher risk transactions -- one's number would have to change often, if the card's not reloadable. Then again, I can't imagine many people using it for overseas travel. In that case, it seems there may be a more favourable option in the form of TravelMoney (also from Visa). The for at least a full year statement with regard to its validity/expiry period that's mentioned on the card's home page puts me off the most.

Overall here, I think it's a good card for a 'first mover' in to the market to use marketing speak.

I'd be interested to see what denominations of preloaded values end up being available, or whether it could be determined largely arbitrarily at time of purchase. Of course I wouldn't want to have a large amount loaded, but equally I wouldn't want to have to change often, were I to get one for purchasing reasons (as opposed to present giving reasons). The home page, though, suggests it can be between $25 and $500, but doesn't say exactly what particular values can be loaded.

Interestingly, they have a partner of sorts in the venture, so I'm guessing, like their Good Call prepaid calling card, it's probably some sort of reseller/resale arrangement with said partner (in Good Call's case, it's some people called CardCall, and in this case, some outfit called WildCard Systems). They're using some of their subsidiary Kiwibank's systems though, it seems, if the private bag number for Prezzy Card disputes is the same as Kiwibank's.

Now, why don't any banks here (Westpac did, I hear, but they aren't taking any new customers) do cheque cards, or transaction account-linked 'credit' cards? If they did, I wouldn't have a particularly desperate need for a credit card anymore. I don't really need the credit, but I'm forced to get it, and the risk that comes with it.

Delving deeper in to the product's fine print, there are some nice ones that that I haven't mentioned yet. If the card's worn out, it's a $20 fee (which also applies if one's lost it, which seems fair enough). Also, one can't use it to get cash out of a money machine or while at a shop, nor use it for gambling websites (the latter sounds like something to keep the post office's US-based business partner out of trouble).

Overall, in a naive sense, I hope it helps encourage people not using credit cards for credit. It sounds like a fun thing, too. Maybe I'll get one anyway for amusement.

Another reason I mentioned it here is the usefulness of (overseas) travel, should I do that in the future. Useful as a backup, but I have no idea if I could get a card replaced while overseas. Perhaps yes, but maybe way more than the stated $20 fee.


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