Credit and Debit Card Ratings

Prepaid Cards Are Not Just For Gifts Anymore

A new report issued by Mercator Advisory Group finds that more consumers want prepaid cards for themselves, not just friends and family.

by Chris Warren

For years now, prepaid cards have been a handy fallback for the unimaginative or too busy gift giver. Don’t know what to get grandpa for his birthday? No problem. Just grab a gift card from Target or Wal-Mart and let him decide.

While there’s little doubt that gift cards will remain a popular form of prepaid cards, a recent report from Mercator Advisory Group suggests that consumer tastes are changing. For its report, “Prepaid 2013: U.S. Consumers Buying More Prepaid Cards for Own Use,” the Boston-based payment and banking industry consultancy surveyed 3,000 adult American consumers in order to gain deeper insights into changing prepaid card usage.

On the most basic level, Mercator’s results confirmed what other research has been repeatedly saying about prepaid cards: More people are getting them. In fact, Mercator found that 53 percent of adults surveyed had purchased prepaid cards during the preceding year, an increase of six percent from 2012.

While it remains true that the majority of prepaid cards purchased by survey respondents were for gifts, Mercator says that the percentage bought for a consumer’s own use is rising. This is particularly true among consumers who buy so-called “virtual cards,” which are prepaid cards delivered via text or through a mobile app. Among those surveyed by Mercator, half bought virtual cards for their own use while the other half purchased them as gifts for others.

According to Karen Augustine, manager of the CustomerMonitor Survey Series at Mercator and the report’s author, financial institutions are eager to understand just how much prepaid cards will be accepted among consumers. “As new banking regulations force many banks to raise fees on checking accounts and debit card rules continue to be challenged, many in the banking and payments industry are looking to prepaid cards to gauge their use as a preferred payment tool,” she says.

If the results of the Mercator study are any guide, expect an even bigger embrace of prepaid cards in the future. “Prepaid buyers are more likely to be younger, mobile-enabled, and buy cards for their own use. Prepaid cards are becoming more of a primary payment method and not relegated only for gifts,” she says.

Category: Best Low Fee Prepaid Cards

Millions of people are turning to prepaid debit cards as a smart alternative to carrying cash and writing checks. Almost anyone can qualify and they don’t require a credit check or a bank account.

Though they carry credit card logos and can be used anywhere a credit card is used, unlike a credit card, they do not offer a line of credit. The user can only spend the amount that has been loaded onto the card or placed into the account associated with the card.

There are dozens of debit cards on the market, many of them issued by the same bank, but fee structures are vastly different. Bestprepaiddebitcards.com has done all the research for you and provides comprehensive reviews to help you decide which card is best for you.

GO2bank Offers Overdraft Protection up to $300.

And build your credit with the GO2bank Secured Visa® Credit Card with no annual fee*, no credit check*, and no impact to your credit when you apply. (sponsor link)

  • How To Keep Holiday Spending Joyful

    How To Keep Holiday Spending Joyful

    Prepaid debit cards can help you stick to your budget.

    by Shane Tripcony

    It seems to happen earlier and earlier each year. Even before the little ones don their witch and ghost outfits to go out trolling for candy on Halloween night – let alone before anyone has planned out their Thanksgiving Day feast – many stores around the country already are decorated with evergreen wreathes and plastic Santas.

    To be sure, this makes absolute sense for retailers, many of whom rely on the holiday shopping season to account for as much as 50 percent of their annual revenue. In other words, it’s just good business to try and stretch the duration of the holiday shopping season as long as possible, even if it does occasionally also stretch credulity.

    But what might be good for storeowners is not necessarily in the best interest of all of us shoppers. Which is why so many personal finance pros urge us to make a detailed holiday shopping budget and stick to it. The first part is easy. Indeed, according to a recent survey by Capital One Bank, fully three-quarters of all Americans say they are likely to come up with some sort of holiday spending budget this year. But the same study also hints at the reality of what usually happens: Almost half of those who say they’ll budget for the new sweaters and Xbox games they plan to buy aren’t confident that they’ll actually stick to their best-laid plans.

    But it is possible to be both generous for the holidays while simultaneously ensuring that you don’t wake up with a financial hangover in the New Year. Step one is to do exactly what personal finance experts have been urging holiday season after holiday season and actually make a budget. Only you can determine what makes sense given your current financial situation and expenses. The consulting firm Accenture pegs the amount U.S. consumers are likely to spend this year on gifts at $646, an increase from $582 last year.

    Whatever you decide that number should be, step two is to take that amount and load it onto a low-fee prepaid debit card. Doing so – and being disciplined about using only that one card for your shopping and not adding more money to it once it is depleted – will ensure that you stick to your budget, even when your holiday spirit is threatening to overwhelm your best financial interests. Why not just use a gift card? That could make sense if you decide that you want to do all of your shopping at just one store. The beauty of dedicating a prepaid debit card to all of your holiday shopping is that it gives you the flexibility to make purchases wherever Visa and MasterCard are accepted, which is basically everywhere.

    Just as we here at BestPrepaidDebitCards.com urge you to select cards with low fees for day-to-day use, the same imperative applies for holiday cards. You still want to select a card – like Serve from American Express or Chase Liquid – that doesn’t hit you with many fees. There’s no need to be a Scrooge this holiday season. Just get a little budgeting help with a prepaid debit card to ensure the good cheer lasts into 2014.

Credit and Debit Card Ratings