Why More and More People Are Opting for Prepaid Debit Cards

It’s a quite obvious that prepaid debit cards – those cards that you deposit load of cash, and spend from here and there – are quite hot.
Research shows that in 2009 alone, consumers approximately loaded $29 billion on such cards. These cards are very popular among young adults and those who are considered as underbanked (people with little access to typical financial institutions, such as banks). On the following year, the amount catapulted and reached a whopping $202 billion, that’s according to the estimated report from the Pew Charitable Trusts. Suze Orman, a budgeting guru, is even marketing a prepaid card.
So to understand clearly why more and more consumers are opting to use debit cards than credit cards, Pew’s Safe Checking conducted a research in the Electronic Age project arranged focus groups last fall of 2012 in both Houston and Chicago.
The gist of the research shows that, more and more users do not like the heap of fees associated with prepaid cards, but still seem to prefer for it over the higher and, from their opinion, less highly unpredictable fees that goes along with the standard checking account.
Results of the research shows that, people seem to feel more comfortable on paying fees associated with their use of prepaid cards, which participants from Houston call is more transparent, to charges such as overdraft fees, which can get into the picture when using checking accounts at banks.
Many of the participants are also uncomfortable on the idea of adding credit options on their prepaid cards, since they are very satisfied with their cards as it help them stick to their budget and prevent them from overspending.