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More Americans turn to pre-paid cards
7 Jul 2010

More Americans are using pre-paid credit cards, according to a new survey.

Auriemma Consulting Group has published its Cardbeat report which reveals 42 per cent of respondents own a network branded gift card - a 16 per cent increase from 2005.

Around two-thirds of those surveyed have a pre-paid store card, which can only be used in that specific retailer.

Nancy Stahl, the editor of Cardbeat, claimed that these types of cards could be widely used in the future.

She said: "General-purpose stored-value cards have the potential to replace traveler's and payroll deposit checks in the same way that gift cards replaced paper gift certificates, but fewer than ten per cent of our consumers have used a prepaid travel or payroll card."

One-third of parents would give a pre-paid card to their children and a further third said they would consider it.

The cards are considered to be suitable for young adults as children can only spend the amount loaded onto them, meaning they also learn how to budget effectively.