Personal finance predictions for 2010: Your paycheckMore businesses will replace paper checks with prepaid cards
One day, perhaps this year, your paycheck may disappear -- replaced by a prepaid card.
As recession and regulation restrict the use of other cards, prepaids are gaining favor as the clean alternative: no messy revolving debt, little risk from hackers, no penalties or interest.However, some prepaid cards come laden with fees, so consumers must be mindful of the fine print.
Prepaids work like debit cards, though they need not be linked to an account of any kind. You don't need a bank account to cash them, and you can never dig yourself into debt with one.
According to Mercator Advisory Group, the prepaid card market grew from $220.3 billion in 2007 to $247.7 billion in 2008. The increase was largely driven by federal and state governments switching to them to pay out unemployment benefits, food stamps, Social Security payments and civil service paychecks.
Small businesses, especially those that employ unbanked workers, like the convenience. Governments and industries struggling to eliminate paper are onboard as well.
Little wonder that Visa, MasterCard, American Express and Discover, as well as Bank of America, Citi and Chase, are investing heavily in the prepaid proposition.
Next in the countdown, 4: Your home
See related: More employees say hello to payroll checks, 9 things you need to know about prepaid cards, 8 tips to reduce unemployment prepaid card fees, 5 secrets of smart debit card use, Study: Prepaid card full of hidden dangers
Published: December 31, 2009
 |
 |
 |
 |
Three most recent Emerging payment systems: Prepaid, debit, gift cards stories:
- Pros and cons of tax refund prepaid cards – Getting your IRS refund on a prepaid card -- offered by most big tax preparation firms -- has its benefits, especially for those without a bank account ...
- Don't toss out that expired Groupon – Deals from Groupon and other daily deals sites aren’t so great when they expire before you can use them. Luckily, there’s some good news for procrastinators: Just because your Groupon expired doesn’t mean you lose all your money on it ...
- How to save on debit card foreign transaction fees – We've researched what each major debit card issuer charges in foreign transaction fees -- and give you tips for avoiding them ...
|
 |
 |
 |
 |
 |
 |
 |
 |
CreditCards.com's newsletter
Did you like this story? Then sign up for CreditCards.com’s weekly e-newsletter for the latest news, advice, articles and tips. It's FREE. Once a week you will receive the top credit card industry news in your inbox. Sign up now!
|
 |
 |
 |
 |
|