Pre-pay spending card on the way

any idea which banks will be launching this just out of curiosity.

what is the difference between this and a debit card \?

In message , Saleh Jambo wrote

The BBC2 Working Lunch program has had an item on this.

The charges are very high. Around £10 to get the card, a £1 charge on every spending transaction, a charge to put money on the card etc.

Bottom line - probably not worth owning if you already have a debit or credit card. Aimed at those without a bank account, or a source of credit, but very expensive to run.

The ability to compartmentalise. You control the credit limit on the card by how much money you choose to charge it up with, instead of letting its user (or a thief/fraudster) potentially empty your whole bank account.

In short, it is the same difference as between a pre-pay phone and a contract phone.

After one year, can you ring your card issuer and demand the best card that's out at the moment, even though you don't really know the good ones from the bad? And for free dammit!

:P

At 13:42:38 on 16/09/2005, Alan delighted uk.finance by announcing:

Insane. Only idiots or the desperate are going to take this on. But I can see it being popular amongst the increasingly large number of bankrupts there are apparently going around.

Why is it that so many often it is the people who can least afford them that have to pay the highest charges? A pre-pay card carries a much lower risk (for the issuer) than a credit card, so the charges for using one should be less.

"Graham Murray" wrote

How do you expect them to pay for their admin(etc) costs?

With credit cards, the merchant pays those, AIUI.

From the fees they charge the merchant for accepting the card, as with any other credit card. With pre-paid credit cards they also have the bonus of earning interest on the credit balance that exists on the card.

Chris

So it will be easy for you to start up a similar card, charge significantly lower fees to cut out the competition, and make a killing!

"Ronald Raygun" wrote

But you can have exactly the same effect simply by opening a "spare" current a/c, with a new debit card which you only use for the purposes for which you would otherwise have held this new card.

So the question still stands - what is the difference between getting one of these new cards, or getting an additional current a/c with a debit card?

In principle there is no difference, since in a way it behaves as though there were a current account at the end of it, which comes pre-charged, though it wasn't clear from the article how it would be re-charged. It could be that, like phone-cards, they're use-once and disposable, bought over the counter for cash, then used up until empty.

Because the article says "The new-style card will be targeted at the two million households in Britain that do not have a current account or savings account." it seems that to the target market "simply getting a spare current account" is not an option, and so this scheme offers a real alternative.

I think that they are not.

Unfortunately, because I can see a need for such cards and people might be prepared to pay a fee for this.

But the APS card does seem to be one that expects an on-going relationship with the customer.

tim