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Newsletter

Pre-paid cards 'a grow area'

By Sarah Engle, Thu 18 Sep 2008 - Published in Credit Cards

Newcastle Building Society has suggested that pre-paid credit cards may be one area of the market to avoid the ongoing credit crunch.

According to the firm, the total number of pre-paid cards issued in Britain is predicted to reach more than 10.8 million in 12 months time, with the combined total spent tipped to be over £697 million.

Figures analysing the market show that 70 per cent of pre-paid cards are used in the gift sector, with this expected to fall to 40 per cent in 2012 as other areas become more popular.

The company predicts that the cards' use for debt management could increase form one per cent to ten per cent over the same period, while travel could rise from four per cent today to account for ten per cent of the market.

Meanwhile, gaming is expected to grow from three per cent of the market to ten per cent by 2012, with the firm claiming the cards are a move towards the "cashless society".

Kriya Patel, head of card solutions at Newcastle Building Society, commented: "The popularity and growth of prepaid cards over the last year is astounding."

Earlier this week, research analyst Defaqto suggested people ensure they meet their credit card's monthly payments in order to keep their finances in good stead during the credit crunch.