Pre-paid cards ‘help people budget’

Using pre-paid cards instead of credit cards can help people to budget more accurately, as well as being convenient and secure.

That’s according to Mark Simon, chief executive of card provider Tuxedo, which is teaming up with the Sun and Newcastle Building Society to launch a pre-paid card.

“There is no credit involved and as a result there is no risk of going over-drawn and there is no risk of incurring credit costs,” he said. “It allows people to plan and control their finances according to the credit they have.”

Because buying online requires a credit card, pre-paid cards offer a secure and simple way for consumers to purchase via the internet as well as on the high street, Mr Simon said.

“You’re putting money on a card which is very convenient and secure but also using it for payments online and offline,” he explained. “It really offers the customer … convenience and, crucially, security.”

Such a card could be especially useful for people with a poor credit rating. “This is absolutely for them because they can spend money they have and they don’t have to incur credit exposure,” Mr Simon said.

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