Debit And Prepaid Card are Cunsommers' New Darlings

Debit and Prepaid Cards Are Consumers’ New Darlings

In the wake of the recent Credit Reform Act and persistent economic woes, consumer appetite for credit has reached an all time low. Instead of relying on the buy now, pay later model,

countless reports and surveys, such as this one from Javelin Strategy and Research, are revealing that consumers are being more prudent when it comes to their purchases, preferring to spend more within their means. They are also favoring plastic-based, pay now options, such as:

    * Debit cards. These cards typically come with either a Visa or MasterCard logo on them. They are used much in the same way as a regular credit card, except that the transaction money comes immediately from the card holder’s bank account.
    * Prepaid gift/debit cards. A store-valued card that can be used to make same store purchases up to a specified amount.
    * Secured credit cards. These cards work like a regular credit card, except that a minimum deposit- usually of a few hundred dollars- is required to open the account. The available credit is then limited to the amount of money deposited. Cardholders generally pay fewer fees and finance charges with this option, and it has thus become a good credit-rebuilding tool.