Firm forecasts growth in prepaid cards sector
Prepaid card users will increase from 2.3 million to seven million over the next two years, the Fair Investment Company has predicted.According to the firm, the growth of consumer debt fears as the credit crunch continues will make the cards an attractive payment option for many.This is because, unlike credit cards, it is impossible to build up debt by using them - as the holder must "top up" the card prior to buying goods.Accordingly, by 2010 the firm forecasts that the prepaid card industry will be worth £4 billion.Phil Alcock, credit card expert at the firm, added: "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."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."According to charity Credit Action, the total level of personal debt in the UK exceeds £1.4 trillion.
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