Prepaid cards can help people with debt management as well as offering enhanced security against fraud, it has been claimed.
Chris Reddish, chairman of Prepaid International Forum, explained that as the user can only spend money that has been placed on the card, there is less likelihood of identity thieves building up credit card debt on the products.
“If you’re just putting something on the card to spend on the internet, it is there for a matter of minutes and that opportunity isn’t there for fraudsters,” he noted.
He also revealed that some people use the services as “budgeting tools” in order to help them control their spending.
Recently, figures published by Apacs – the UK payments association showed that plastic cards made up 66 per cent of total UK retail expenditure in 2008, with debit cards accounting for two-thirds of this.
More people have been using debit cards for transactions, the organisation revealed, while credit card spending has remained flat.
By Jamie Price