When the credit crunch is around many companies and industries try to reinvent or come up with new ideas to create additional revenue streams and that is what UK credit card companies have done by creating Prepaid Credit Cards .
These cards are much like a standard credit card, however you cannot go into debt on them, you have to top them up with money and can only spend whats on it.
So what are the advantages of these cards? Well they do help you budget by allowing you to upload a certain amount every month (you can even get paid from your employees direct onto the card) and thus never go over this limit. They are also great for travelling as they are safer than alternate methods of carrying money or taking other cards abroad. The Travel Cards are a big selling point by these companies.
The downsides are that they do still charge you for certain activities on them and so you will be spending more than say using cash money.
Will these be the next big thing in finance ? .... i don't think so but they could become quite successful ! So watch this space.
I came across this as an alternative to taking travellers cheques on holiday. The travel agent advised we could take one of the visa currency cards and spend it in most places that accepted visa.
He did warn that if someone were to swipe the card as part of a verification process, charging a zero amount the card would become void.