For those mostly sick of dealing with banks and the headaches created by loans, perhaps it`s time to consider giving a prepaid credit card a shot. These cards have been gaining lots of momentum recently, because they enable the user to set their own credit limit by the amount of cash poured into the account.
The Mercator Advisory Group of Boston recently released a report that showed nationally “prepaid debit card business is booming,” which sounds like a beacon of hope in a very tumultuous economic sea right now.
Their reasoning for such an influx this: the rises on fees at checking accounts. And now, banks like Wells Fargo have added debit fees as well on top of everything else, making prepaid cards seem like an even more attractive alternative.
The report illustrated that the amount users have been putting into the prepaid debits is bound to jump up past $70 billion before 2011 comes to its end. Mentally compare this with the years 2008 and 2010. 2008 had the rate at only $12 billion; 2010 had it at $42 billion, according to the Mercator report.
There are numerous positives as well as negatives for a customer that goes down the road of prepaid cards. Before jumping into any given situation, they will want to weigh the potential outcomes.
Most of the people that will say “yes” to prepaid cards are people with low or non-existent credit; therefore, prepaid cards look especially appetizing to their palettes. According to article posted at the Fox website, there are about 50 million Americans in this financial state. That’s 50 million people who have probably (if not already signed up for one) considered going prepaid.
It also helps to have a prepaid debit card around to curb the pressure to spend more, as you can only go within the range of the cash you have put aside for the account (thus, your credit limit). It’s also promising to note these cards don’t come with interest rates, which helps credit-crippled individuals.
People who have let too many checks bounce may also be interested in prepaid cards and in fact, some employers actually use prepaid cards in lieu of traditional paychecks.
For many though, prepaid cards are a “last resort.” But it’s a last resort they nonetheless have to take.
