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Prepaying may end credit card debt

01/08/2008

The prepaid credit card market is growing, with the current figure of 2.3 million holders expected to rise to seven million by 2010, according to Fair Investment.

People with bad debt have frequently used prepaid cards – which allow consumers to top up cards similar to a pay-as-you-go mobile phone – as they do not have the risk of credit cards, the finance information provider said.

Phil Alcock, credit card expert, said: "You top up the card with money and then use it to pay for goods, safe in the knowledge that you can never go overdrawn or into debt."

It is "simple, effective and safe", he commented.

Besides people concerned about debt management, parents may find such cards suitable for children, while holidaymakers can also take money abroad without worrying about debt accruing from credit card theft.

Online shoppers wary of putting their details on the web may also find prepaid cards comforting, PayPal has said, following the launch of their own card.

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