Prepaid credit cards can help people stay debt free, according to Tuxedo, a company that offers such a product to the market.
One of the benefits of using such a card is that no debt is taken on, according to the firm’s chief executive, suggesting it is possible to remain debt free while enjoy the flexibility that a credit card can offer.
“There is no debt to pay off with a prepay card – you spend what you have,” said Mark Simon from Tuxedo.
“There is no credit involved and as a result there is no risk of going over drawn and there is no risk of incurring credit costs.”
Mr Simon also added that the method of spending allows consumers to manage their finances according to how much money they have, rather than in the way that a traditional credit card allows the taking on of debt.
According to the chief executive, the payment method is “very popular” in the United States where it was introduced earlier and has already caught on.
The Tuxedo website claims that anyone can get one of the firm’s prepaid Maestro cards, while no credit checks are required.