19 February 2010 17:05:23
|Prepaid cards help consumers rebuild credit histories.|
Usage of prepaid credit cards is likely to increase in the UK as the country moves out of recession, it has been suggested.
According to Neil Munrow, a spokesman for business and consumer information company Equifax, growth of the prepaid card industry has not been as rapid as expected over the last few years.
However, he believes this could change as credit card companies become more selective about who they provide to.
This is because some prepaid cards offer consumers who find themselves unable to secure a traditional credit card an opportunity to rebuild their credit histories.
Crucially, no credit checks are carried out by providers before a prepaid card is issued, meaning consumers have access to the products as long as their identity can be verified.
"Many will start to realise that credit is becoming more difficult on cards and there are increasing re-payment issues," Mr Munrow confirmed.
"Pre-paid cards will be a way of giving you a similar credit card service."
As well as enabling customers to rebuild their credit histories, prepaid cards are also finding popularity among holidaymakers keen to avoid paying foreign exchange fees on overseas credit card transactions.