The Rise of the Prepaid Debit Card Industry - Finance - PersonalFinance

As technology continues to advance, so have peoples' preferences. With more choices in the financial sector comes fierce competition, but it may be safe to say that prepaid debit card companies are holding their own against banks and credit card companies. Only a couple of years ago, it was commonplace for a vast majority of people to have bank accounts, but the prepaid card industry is changing that. As users become more aware of the greater number of benefits provided by prepaid cards and the fewer amount of fees associated them, many consumers are making the easy switch to prepaid cards.

Branded prepaid cards such as Visa and Mastercard carried by an overwhelming number of companies and merchants continue to flourish, even in this down turned economy. Financial Services Technology reported that, "a decade ago, prepaid debit cards were barely in use, today they are the most attractive option to the roughly 80 million consumers who have little or no access to bank accounts." And they aren't the only website with such overwhelming statistics. InComm announced a, "200% year over year growth in the prepaid card sector." And Packaged Facts, a market research company, "predicts $200 billion on prepaid debit cards in 2011." It's plain to see that the way people are spending money is changing with the introduction of new options like prepaid cards.

As prepaid debit cards (/) provide nearly all the benefits of a bank account, people are continually making the switch. With a prepaid card, users can spend money online, pay bills online, have pay checks directly deposited, and even transfer money. Additionally, prepaid debit card holders can rent cars, buy gas, and even rent hotel rooms! The possibilities are ever growing and have given the prepaid card industry a strong hold on the market.

Prepaid debit cards (/) also serve as great money management tools which has influenced the switch for many consumers. It's plain to see why prepaid cards are more frequently the choice for consumers during this recession. Credit cards have put many people in debt and encompass this attitude of "spend now, pay later" which is why many people are in bad financial situations to begin with. With prepaid debit cards, people can learn how to budget and manage their finances, spending only the money they have and budgeting their life accordingly.

Consumer's buying habits are changing and prepaid debit card companies are there with options. This industry continues to grow for a reason - the benefits and appeal of prepaid cards are better aligning with the economy and consumers' needs.