Rosy Future Predicted for Pre-Paid Cards

The prepaid credit card sector will grow in years to come, the Fair Investment Company has claimed.

According to the firm, the 2.3 million holders of this kind of credit card will grow in number to seven million over the next two years. This is because customers' own financial concerns provoked by the credit crunch are predicted lead them to look for payment methods which do not allow further debts to be built up.

This is precisely the benefit offered by prepaid cards, which are "topped-up" by the customer prior to use. They also offer the functionality of a mainstream credit card, allowing customers to carry less cash.

The Fair Investment Company forecasts that this increase in popularity will result in the prepaid card market being worth a total of £4 billion by 2010.

Phil Alcock, credit card expert at the firm, said: "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."