Over recent years a number of prepaid payment cards have been introduced in the UK, and some industry officials claim that this could be the way forward for many people, as it will increase the ability of some consumers to enjoy the ease and convenience of spending on a card without having to carry around cash or use cheques. Officials state that those unable to get a credit card or a bank account facility could particularly benefit from these cards.

The cards can also benefit other consumers, and one industry official recently stated: “While the strength of the euro is of concern to holidaymakers, using the wrong foreign exchange product can be even more costly. If you are stuck with an uncompetitive debit or credit card and don’t have time to get a new one, prepaid cards can be a good option. And you don’t need to worry about overspending on your holiday budget.”

One such card, the Cashplus Gold card, offers a credit building facility. An official from moneysupermarket.com said: “The significance of this is huge for people who have either lost their credit eligibility or for migrants who have no credit footprint at all. The creditbuilder feature enables these people to show credit card, loans and mortgage providers they can regularly make monthly repayments and so build their rating at no extra cost. It helps people take the first step back to credit eligibility.”

However officials have pointed out that the cards are not regulated and therefore consumers are not protected under the Consumer Credit Act. One spokesperson from the Prepaid International Forum said: “Prepaid cards are not for everyone. People have a choice about whether the benefits of having the card are worth the fees, and they are not forced upon people.”