As the credit crunch hits the UK, Fairinvestment.co.uk, leading online comparison site, announces that prepaid credit cards are no longer just for people who have bad credit histories, and could be the answer to those who are looking for the functionality of a credit card but want to avoid the risk of debt.
“A prepaid credit card offers a simple, effective and safe way of paying. 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,” explained Phil Alcock, credit card expert at Fairinvestment.co.uk.
There are currently about 2.3 million prepaid credit card holders in the UK, and this figure appears set to keep on rising as people realise the benefits of a prepaid card – by 2010, the prepaid credit card market is estimated to be worth around £4billion with more than 7 million prepaid card holders*.
Because prepaid credit cards offer the same functionality as a credit card but without the risk, they have generally been associated with people who have bad credit histories and who have found it difficult to get a normal credit card. Although prepaid credit cards still offer this valuable service, they are increasingly being used by people who could easily get a standard credit card but choose prepaid for their flexibility and convenience.
Prepaid credit cards are a good method for making online payment, this is because the only money that is at risk is what is loaded onto the card. The Optimum Prepaid Master Card has been specifically aimed at people concerned about the security of online spending.
Anthony Graham, Marketing Director at 360money, the prepaid network behind Optimum, commented, “People are increasingly worried their banking details might fall into the wrong hands when they purchase online, and with good reason. Optimum allows people to enjoy all benefits of shopping online without having to fear of fraudsters accessing their banking details.”
Prepaid credit cards are also a very good budgeting tool – users can pick their limit, load it onto the card and that becomes their budget. It is for this reason that they have become very popular with parents who want to give their children financial independence but limit their spending power.
“Parents looking for a way to educate their children to be responsible with their money find that prepaid cards provide an excellent teaching method because they give the child the chance to be independent and even purchase goods online, but there is a strict budget in place. This can be handy for everyday life, or perhaps if a child is going on a school trip where they need cash,” said Mr Alcock.
Prepaid cards, which can be used all over the world, have also seen a hike in popularity as families begin to use them on holidays abroad to keep their holiday spending in check.
The currently available prepaid credit cards are also highly convenient as they can be topped up at designated retailers, online, in banks, via BACs and then spent in store, online, at cash points and anywhere in the world with the Maestro acceptance mark.
About Fair Investment
www.fairinvestment.co.uk, is an independent online finance portal, providing comparison tools, including a free prepaid credit card comparison service, personal finance news, reviews and information on a wide range of financial products and services, including insurance, credit cards, mortgages, loans, savings and investments.
Fair Investment Company is a leading internet player that sees 400,000 unique users per month, sells over £5 billion worth of mortgage enquiries and is a Hitwise 100 Banks and Financial Institutions site.