There is a new kind of card in Canada called a pre-paid card. Make no mistake, a pre-paid card is not a credit card but can be used anywhere that Visa or MasterCard is accepted.

Pre-paid cards can be useful if you have poor credit or don't want to jump through the hoops of getting a normal credit card. You can use them for most things that you can a regular credit card such as making online purchases or using as a cash replacement to avoid carrying cash.

Before using your pre-paid card, they generally need to be loaded first with cash. Each prepaid card is different in the minimum and maximum amounts that you can load the card with.

Pre-paid cards have a lot of different fees associated with them so you should be educated about how much the card is going to cost you to have in your day to day usage. Fees can include signup fees, load fees, monthly maintenance fees, paper statement fees, refund processing fees, insufficient funds / overdraft fees, and foreign currency conversion rate fees.

As well, all pre-paid card have expiry dates that you should be aware of. This is generally 12-24 months from the date you got the card. They may also be subject to a higher rejection rate than a normal credit card when a vendor tries to pre-authorize a higher amount than the actual purchase and you don't have enough money loaded on them.

Over the coming weeks, we will be discussing pre-paid cards in more detail and doing detailed comparisons of the pre-paid cards available in Canada.