This idea is similar to prepaid mobile phones or Internet access. You hand over your money; say, $50, and get for that a credit card. The card's amount of credit is slightly less than the money you handed over, with the difference being an administrative fee. You can use the card in all the ways you can use a regular card, except that it is not rechargeable. Once you use up the credit, you throw it away (or perhaps return it to get back a deposit). If you have any leftover balance, you can roll it over into a new prepaid credit card, or use it to partly pay for a purchase.
There would be several markets for this card: first, there would be people who don't usually need a credit card (and would rather avoid the hassle of having one), but need to make once-off payments by credit card (such as for registering an Internet domain; it happened to a friend of mine). If the prepaid card is lost, you just lose the money you put into it, and don't need to bother about cancelling it or disputing fraudulent transactions. Parents could also issue their children (who are not of legal age to own a "real" credit card) with these for emergencies. Also, a side benefit would be that there are no bills or audit trails, so the card could prove useful for people wishing to pay for various services they would rather not have their spouses know about ("Honey, what's 'Blonde'n'Busty Escorts'? It says here you paid them $199.")-- acb, May 25 2001 Half-baked here... http://www.newsgate...umers/msg03600.html [angel, May 25 2001, last modified Oct 04 2004] ...and fully baked here. http://news.zdnet.c...0,,s2081200,00.html [angel, May 25 2001, last modified Oct 04 2004] //Banks would have no interest in this idea.// http://www.skybank.com/Sorry, [waugs], beg to differ [angel, May 25 2001, last modified Oct 04 2004] The problem with debit cards is that they require a bank account to debit from (and if someone steals your number, you're screwed). This idea is for a limited-use card with a prepaid, non-renewable line of "credit", not linked to any accounts.-- acb, May 25 2001 ...except for the situations where you cannot use cash (i.e., over the Internet). And the credit card infrastructure is already in place, so this would be easier to implement than some form of digital cash or wire transfers or somesuch.-- acb, May 25 2001 Micropayments, using PayPal or whatever.
I like the idea of a card which you recharge using some cashpoint or shop or whatever. However, if there was no way to stop other people than the rightful owner from using it, then its no more secure than cash.-- Pallex, May 25 2001 [waugs]: Yes, gross isn't it? The <alt> for the blue 'Skybank' button is 'Click Here to visit SKYBANK.com - the Internet's first Prepaid Credit & Calling Card' Hit 'Tell me more' on the left-side nav menu.-- angel, May 25 2001 This has been heavily marketed in my area. The idea is to get one for your teenager, to allow a bit of financial freedom as well as be able to see where the money was actually spent. I think it will catch on.-- djanaba, May 26 2001 Yes, I've read a couple re teen marketing as well. Seems to me I even saw this advertised in a 7-11 convenience store recently. Wherever it was, the premise was being able to purchase goods over net, amongst other things. For those who have no credit to begin with or those with undesirable credit, this does offer benefits of being able to purchase what would hopefully be an investment i.e. computer/software or music gear or whatever not only gets their jollies but provides an income doing what they enjoy. This is of course, far better than merely purchasing what ultimately turns out to be an expense. In terms of auto rental - anything that smacks of debit in any way will require extra deposit. Understandably, these agencies want to be able to recoup any further charges or losses immediately.-- thumbwax, May 26 2001 As long as you don't insist on it not being 'rechargable', there are lots of ads for this on TV here in the US. Put 500$ in an account with them, and have a 500$ credit line. Called a 'secured' credit card.-- StarChaser, May 26 2001 StarChaser: The problem with secured credit cards is that you need to apply for them, fill in forms and wait for the paperwork to go through. A prepaid card would save you the hassle; just go to the nearest 7-EvilMen, hand over some money and pick one up.
Of course, it wouldn't count as proof of identity, but the numbers given could be flagged to say as much, allowing the minority of applications needing proof of ID to disallow them.-- acb, May 31 2001 (1) If the government didn't decide to implement its intrusive "know-your-customer" regs, it might be useful to have cards which could be purchased and used anonymously, as is the case (much to Big Brother's regret) with prepay phone cards.
(2) I read that one card company, I think it was Amex, would as a service issue cardholders a bunch of "account numbers", all of which were associated with their account, but each of which could only be used once. Such numbers could be given to on-line merchants without fear of their being used inappropriately by anyone else who might intercept them.-- supercat, May 31 2001 Acb: Ah, ok. Kind of like a phone card. Wal-Mart has something like this, a gift card that can be 'recharged'. My fiancee uses it for rewards and teaching her kids about money.-- StarChaser, May 31 2001 Wall-Mart has a " gift card " that works the same way except that you can put more money into it. I use it for the three cents a gallon gas discount if you use the card. WWW.geocities.com/KindlyRat-- KindlyRat, Jun 01 2001 KindlyRat, if you read the annotation directly above yours, you'll see I said the same thing...-- StarChaser, Jun 02 2001 This sounds like it might be more susceptible to fraud than current conventions.-- cmeador, Jun 13 2001 heres a different sort of idea, how about banks offering a visa or mastercard debit card that can be used the same as credit card except the acct must always have funds in it, the way i see it you could have your normal savings acct aswell as the debit visa card that you could transfer funds to as u need them. this way parents could transfer funds to the card for kids to use, or funds could be transferred onto it for online purchases.what do others think ??????-- krayzie_au, Aug 08 2001 I think that a capital letter here and there might be a good idea, as would an apostrophe, a *single* instance of a punctuation device, and the correct spelling of 'you', but then I'm known for that sort of thing. Also, I think that your idea is for a debit card on an account with no overdraft facility, which is surely baked. BTW, welcome to the Halfbakery. I'm not always this nasty.-- angel, Aug 08 2001 Ah, yes - saw these on sale in a chain pharmacy just the other day, only forgot to post it. So they're loose in the wild.-- DrCurry, Mar 09 2003 //Get a credit card. Do not use it before putting your salary onto the card, placing it in a credit balance. This is a very handy trick for travelling overseas, get a $5,000 card and stick an extra $5K or so on it.//
In his book "The Art of the Steal", Frank Abagnale describes why the card issuer might get suspicious if you do so. A debit card on a carefully controlled account might work better.
There is an alternative. Some cities have smart cards that work on all modes public transport, and with merchants that make frequent low-value transactions.
These are much better than cash, because they are good for all those transactions that cash is normally used for. They cut down on wallet density and eliminate change handling. Processing is instantaneous and no on-line approvals are necessary. The cards are anonymous and can be given away or exchanged for cash. A refundable US$5 deposit is necessary, but there are no further charges paid by the customer.
My wife has an even better solution, though - she brings her husband instead of her credit card!-- FloridaManatee, Mar 10 2003 Hey abc i have just read your idea and I am trying to initiate a similar service in New Zeaand which is where I am from. I was wondering whether you continued trying to implement a pre paid card and whether it was successful. How did you market it, that is if you did, and did you sell it (thats if you successfully marketed it) and who did you sell it too.-- hushmana, Nov 08 2003 Do you believe that I had the same idea a few weeks ago ? I think it is a great idea and it is being implemented by one bank called Bradesco, here in Brazil. The flag of the cards can be Mastercad Teen or Visa Buxx, you can search it on google! But they are not implementing the idea of a credit card that can be thrown away. Their idea is to have a pre paid card to young people so the parents could have more control on how much their kids are spending each month. The card cannot be thrown away, it should be reload with a new amount of money. If anyone have further ideas or comments about this, please email me. From Brazil, André Gabriel - andregabriel@ufmg.br .-- apvg, Apr 29 2004 Way baked. I get my holiday bonus in the form of a disposable Visa every year.-- justaguy, Apr 30 2004 Might be baked in some countries but as you probably can not take the card to other countries and use it internationally then it is only partly baked and well worth discussing here.
I get the feeling occasionally do that some Americans don't realise that other countries exist and this can be read everywhere in the world. NZ is not part of US. And what is Wallmart?-- Pellepeloton, Oct 12 2006 //NZ is not part of US.// You mean NZ doesn't stand for North Zakota? I'll be darned ... er, zarned.-- jurist, Oct 12 2006 At first I decided to bone this one until I realized that it was first posted about 5 years ago. And even in the US, they didn't really have the prepaid credit cards like they do now.
I think that prior to 9-11, American Express had the internet shopping card that they were selling at 7-11. Because you could buy them right at the counter, no questions asked, I think that many companies were being frauded with nobody to trace it to. I knew of a guy who bought all kinds of stuff from the infomercials by making the first of 4 installment payments but because there was no more money on the card, nobody could go after him or American Express for the consecutive installments. So he got one of those Ronco "set it and forget it" countertop ovens for only $33.-- Jscotty, Oct 12 2006 [Pellepeloton] I heard a rumor once here in the US that there were other countries in the world but we proved that was just an urban legend. Wallmart, by the way, is very large discount retailer.-- augusta, Oct 12 2006 random, halfbakery