The Bourgeoning Popularity Of Pre-Paid Credit Cards

Although not a new thing, pre-paid credit cards seem to be popping up all over the place at the moment, with mobile phone companies even getting in on the act. So with the recent launch of O2's fee-free cards, what exactly are the benefits of pre-paid, especially in an age where tempting the public with credit cards might be deemed irresponsible?

The O2 fee-free cards are set to change the market and have been launched in association with Natwest and Visa. The cards are only available to existing O2 customers, but each is aimed at two distinct demographics, with the Cash Manager card for adults and the Load and Go for children of 13 and over. Both are being marketed as a means to controlled spending, with the former intended to stop adults over-spending and the latter available to give youngsters the flexibility of credit cards with parents still being able to control their spend.

Of course, the launch of the two cards is in keeping with the growth of mobile banking, while more of us are connecting to our account via 3G or broadband instead of needing to visit a branch. Quoted in The Metro, Ronan Dunne said: "We believe that we are at the start of a journey towards the coming together of phone and wallet and we intend, through O2 Money, to be at the forefront of this trend."

Following O2's footsteps is Phones 4U who are also releasing two pre-paid cards but aimed at slightly different demographics. The Escape MasterCard Prepaid Card is said to be for ethnic minorities who will benefit from the assistance of easily being able to move money to their families abroad. The have also released a card for youngsters, the Neon MasterCard Prepaid Card, which allows children the use of a credit card without building up a debt.

Unlike O2's new card, the Phones 4U pre-paids do carry purchase costs, though the £19.99 price tag includes top-up credit. This swathe of new pre-paid cards seems to be seeing the credit card and already popular phone companies realigning the reputation of the credit card as an item that doesn't have to lead to debt because it simply can't be used unwisely. Yet, for those who are sure to benefit from a pre-paid credit card, such as those who have been specifically targeted, it is already clear that more money can be saved by shopping around for the best deal.

You can compare credit cards at http://www.confused.com