Half of the United Kingdom thinks cash is going out, to be replaced by alternative pay methods. Responding to this, only one in five people carry cash daily. Nearly 5,000 ATMs were shut down in the UK last year after debit cards became the preferred way to pay, and 394 are shut down every month.
A study by First Bus had researchers polling 2,000 adults in the UK. They found that many people are instead choosing to pay with chips, pins, and smartphone payment methods. 75 percent of the population now expect every retailer to accept alternative payment methods. While the study found that 44 percent of people were left unable to pay for something because cash was the only accepted form of payment, many merchants are making the transition to only accepting cards. In response to this situation, prepaid options are growing in popularity.
How Prepaid Cards Work
Prepaid cards function much like debit, but instead of taking money from your bank account you simply pre-load the card. Not only do they offer the convenience of debit with a way to help budget, prepaid cards do not force you to borrow from the bank like credit does. In fact, prepaid cards are not tied to a bank at all. This helps users avoid bank fees. A specialist at MoneyPug, the popular UK site used to find the best prepaid cards, explained that you may pay a fee for the card itself.
To load money, you can do it from your bank account at the post office or by using an app online. Some cards charge to load money while others are free. It is best to read the terms and conditions before you get started in order to find the best card for your situation. When a pre-paid card is loaded, you will be able to use it wherever the Visa and MasterCard are accepted.
Another benefit is that prepaid cards do not require a check on your credit. This can help people with poor credit obtain a card they can use every day, as a way to reinforce positive spending habits. It also enables them to withdraw money at ATMs, buy things online, and spend money when they out of the country. Travelers like prepaid cards because they avoid conversion fees. Although prepaid options will facilitate the transition to a cashless future, it is recommended that people read the terms and conditions to avoid unnecessary fees.
Fees Home and Abroad
While the fees are typically low, 59 percent of prepaid card providers charge to purchase the card. If you lose it, 76 percent charge to replace the card. Buying the card specifically for travel, you will probably want to cancel it when you are back. 79 percent of prepaid card providers will charge to do so. Only a quarter of providers charge a monthly service fee, 85 percent of them have a fee to renew. Another thing to look out for is that you are actually using the card, half of providers will charge when the card is dormant.
Prepaid cards are an obvious way to help facilitate travel, they do not incur the same fees a bank will charge you when you are spending abroad. While most of the world may go without cash, globalization and faster transportation have people traveling more often. Not only do prepaid cards help tourists avoid fees, they add an extra layer of security because you can only use the money you already loaded onto the card.
A Cashless Future
Though there are fees, many prepaid cards do not charge you as much as a bank will in international fees or interest on credit. While many people in the UK are no longer carrying cash, there are many people who still solely use it as a way to pay for goods and services. Prepaid cards may help the people who are still not using debit and credit transition. Alternative forms of payment will continue to get more popular as the world uses cash less and less, prepaid cards are one option that can facilitate the process, helping those who only pay in cash dive into the digital future.
Ryan Beitler is a journalist and blogger who covers politics, travel, business, technology, and music. He has been published in Paste Magazine, OC Weekly, New Noise Magazine, and more. Contact him at [email protected]