The use of prepaid credit cards is becoming popular nowadays. You can limit your expenditure the same way you do with cash, and it is handy and convenient like a credit card. But can you use it to book a hotel room?
Unfortunately, the answer isn’t as straightforward as you’d hope. Some accept them, and some don’t. For establishments that do, the policies vary, such as whether you can use them for reservation or only upon either check-in or check-out – which then means you’ll need to contact them to be sure.
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Prepaid Credit Card VS Regular Credit Card
A prepaid credit card is a secured card that you load funds into, which you can then use to pay for services or commodities. Despite the name, however, do note that it is not a true credit card.
You need to load an amount first before you can use a prepaid credit card. Meanwhile, you have pre-approved limits for a credit card that you can spend, then you pay your bank after.
Moreover, you don’t incur debt, neither do you have to pay interest, with a prepaid credit card. This is simply because you’re using your own money that you loaded initially, while you owe money from your financial institution with a credit card.
Why Do People Use Prepaid Credit Cards?
One of the appeals of prepaid credit cards is that it helps prevent overspending. You can limit expenses by just loading the amount you can afford to use.
Furthermore, it’s considered safer to use than cash, especially when you’re traveling. Physical money, when stolen, is more or less gone, whereas registering your prepaid card adds a layer of protection from theft or loss.
More importantly, similar to paying with cash, it helps protect your privacy. It doesn’t carry any personally identifiable information, making it a good option for those who are wary of digital theft.
Prepaid Credit Card Disadvantages
While convenient, one of the downsides of using a prepaid credit card is the hidden fees. From monthly service, balance inquiry, to inactivity fees, those could outweigh the pros of using one.
In theory, adding funds to the prepaid card is almost similar to using a debit card. But that’s the thing – since your prepaid card isn’t linked to any bank account, the deposited amount doesn’t accrue interest.
Finally, you don’t get a credit-history boost with it, since it technically isn’t a credit card. It doesn’t help your credit score; thus, you don’t get the perks tied with it.
Using Prepaid Credit Cards at Hotels
There are some establishments, like Holiday Inn, who honor reservations using a prepaid credit card. For others that accept such mode of payment, they usually require Visa or Mastercard prepaid cards. It is best to contact your chosen hotel regarding their policies.
Unfortunately, there’s still a larger number of hotels who don’t accept prepaid cards for booking your stay. Most would still prefer credit cards, and this defeats the purpose of you picking an alternative to begin with.
However, that doesn’t mean you can’t use your prepaid credit card. While most do not honor it for reservations, a lot of establishments may allow you to use it upon check-in or check-out only. This means you have to be physically in the hotel to use it.
A best practice is to give the hotel a call around 12 hours prior your arrival to get a feel of room availability. You can inform them that you’re on your way, and some may be able to make arrangements until you arrive.
There’s no definite answer on whether hotels will accept prepaid credit cards or not, as it varies from one establishment to another. It’s always wise to get in touch with them first to know their terms and conditions regarding the use of such payment method. You can also ask if they allow vaping in their rooms if that’s another of your concern.