- Monday, 22 February 2010Pre-paid credit cards allow people excluded from mainstream finance to re-establish their credit history and engage in effective
debt management, it has been claimed.
Spokesperson for Equifax Neil Munrow said pre-paid cards were becoming more prevalent as the economy moved out of recession.
"There a lot of people who have impaired credit files and pre-paid cards are a good way of restoring their credit history," he said.
"They are enabling people to prove that they are capable of paying back debt."
Mr Munrow added that the future of pre-paid cards would be market-driven, as many start to realise that obtaining credit is becoming more difficult.
"They will definitely be on the increase," he said.
New figures released by Moneyfacts.co.uk reveal that credit card rates have hit a 12 year high of 18.8 per cent, despite the Bank of England holding the base rate at an all time low of 0.5 per cent.
Moneyfacts.co.uk spokesperson Michelle Slade said providers are concerned about the increased risk of customers not repaying their debts, given the high levels of unemployment.
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