Prepaid Credit Card Usage Surges as Holidays Approach
Prepaid credit cards are gaining in popularity, and their usage is expected to hit an all-time high this holiday season.
Prepaid credit card usage has always increased during the holiday season, and this year looks like it will be no exception. However, in addition to giving gift cards as holiday gifts, many consumers are turning to them for holiday purchases.
Prepaid credit cards, which often come with the Visa, MasterCard, Discover or American Express symbol, enable consumers to spend without the inconvenience of high interest rates and ATM fees. In addition, many consumers, who are simply fed up with the rising interest rates due to the impending legislation of the Credit Card Act of 2009, are simply abandoning their credit cards in favor of a simpler alternative.
In other words, all of the consumers that don’t want to spend the better part of next year paying off bulging credit cards are finding simpler ways to pay for holiday purchases; enter prepaid credit cards.
They allow consumers to “load” the card with a specified amount of cash so that it can be used like a debit card. They offer control and flexibility, both of which are very attractive to consumers, especially during these difficult financial times.
Prepaid credit cards can also serve as gifts to children, friends and family members, as the consumer can give cash to a loved one in a convenient, handy form.
It is important to remember, however, that prepaid credit cards may also come with their share of charges and fees, so it is best to carefully read all of the card’s terms and conditions beforehand.
Advantage of Prepaid Credit Cards
- No interest charges
- No over-the-limit fees
- No credit checks
- No bank account required
- Accepted at all locations that traditional credit cards are accepted
- May also be used online or to pay bills
- Often issued by large banks, such as Citibank, Bank of America and Chase
Prepaid Credit Card Statistics
- The prepaid credit card industry is nearly 12 years old
- Nearly eight billion dollars was loaded onto prepaid credit cards in 2008, which was twice as much as 2007
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