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Prepaid cards may provide Christmas gift solution

13 December 2010 15:51:27

Some stockings may contain a prepaid card this Christmas. image
Some stockings may contain a prepaid card this Christmas.
Almost a fifth of people expect to receive money as a gift this December, but many people are reluctant to tuck cash into a Christmas card in case the recipient thinks they had simply forgotten to buy something. One way to show that effort has gone into the decision-making process could be to load money on to a prepaid card and give family members or friends a gift that will provide lasting benefits, long after the initial credit has been spent.

Money is high up gift lists
While most people love the excitement of unwrapping gifts taken from beneath the Christmas tree, research suggests that many will be receiving money instead this year. A survey of 1,200 adults by First Direct found that 19% of people expect to be given money this Christmas, with the average gift likely to be in the region of £61.

The majority of gift money is likely to be given in the form of hard cash, with the poll finding that 62% of people tend to receive their Christmas money in this form. Cheques remain relatively popular (20%), despite a recent report from the Payments Council revealing that there were 104m fewer cheques written out over the last 12 months compared to the previous year. As Sandra Quinn, director of communications at the Payments Council, explained: "Cheques are very rarely used by consumers to pay for things; they are now mainly reserved for larger transactions, especially moving savings and investments around, although they are still popular for giving gifts."

Other less common ways of gifting money include vouchers and gift cards (9%) and paying money directly into the recipient's bank account (7%). At present, just 2% of people expect to receive money loaded on to a prepaid card, but experts believe the popularity of this payment method will increase dramatically over the coming months.

Benefits of prepaid cards as gifts
A quick look at the benefits of prepaid cards reveals their potential as presents. Firstly, the recipient is likely to welcome the fact that their friend or relative has gone to the trouble of organising one, rather than just dipping into their wallet at the last minute. A prepaid card is also a more secure way of giving money. Whereas cash could easily be mislaid or stolen, a prepaid card cannot simply be picked up and used by another person, as it is protected by a pin. Furthermore, the user can contact their card provider and report the loss of their prepaid card, after which the amount remaining on the card will be reimbursed.

Prepaid cards also provide a greater degree of flexibility than gift cards and vouchers, which tend to be valid in just one or two stores. Finally, recipients of prepaid cards can benefit for long after the initial pre-loaded credit has been spent. This is because, unlike a gift card, prepaid credit cards can be repeatedly loaded with credit and used for day-to-day purchases, enabling users to enjoy the convenience they afford for years to come. ADNFCR-2196-ID-800287835-ADNFCR ADNFCR-2196-ID-19464191-ADNFCR

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