Prepaid Cards & the Cashless Future
The way we use money has been changing for a long time, and all of it points to a cashless future.
Although many parts of the world are not yet using debit or credit as much as the United States and Western Europe, people who use debit and credit frequently have all but completely switched and carry no cash at all.
Cash in the United Kingdom
In fact, one in five people in the United Kingdom do not carry cash at any time. Many vendors and merchants have even stopped accepting cash, and half of the people in the UK believe that cash will soon be a thing of the past. Researchers from First Bus determined that out of 2,000 polled adults, three quarters of them expect all retailers to accept cards or another alternative to cash. It also found that 44 percent of people were unable to pay for something because cash was the only accepted form of payment. Some of these examples included paying for bus fares, parking, and tourist attractions.
While debit overtook cash as the number payment method in June, out of the people polled, only four in 10 believe that alternative payment methods are easier to use. 18 percent said that they spend more money if they carry cash. Many people complain they don’t have time to go to an ATM, which is getting harder. Last year 5,000 ATMs in the UK were shut down. Each month 394 ATMs close on average. 13,000 banks closed in 2018. Checks are also on the decline. 58 percent never use checks, and two in five don’t own a checkbook. A fifth of people only carry around a single pound for the shopping trolley. The people who believe the UK will someday be completely cash free add up to 33 percent of those polled.
The Downsides of Cashless
Going cashless is convenient for many and may reduce petty crime, though there haven’t been adequate studies to prove this. There are still downsides to going cashless. For example, the elderly and disadvantaged populations still primarily use cash as their method of payment. While 2.2 million people in the UK still rely completely on cash, they too are inconvenienced when a retailer no longer accepts cash. The Treasury Select Committee conducted a study last month into consumer access to financial services and determined that the people who still use cash should be carefully considered during this period of transition. Small businesses who prefer to use cash in order to avoid fees are also affected by the move to cashless.
Prepaid Cards May Help
Prepaid cards function much like debit cards, but you simply pre-load the card beforehand instead of depositing money to your bank account. They offered the convenience of debit with better budgeting and the convenience of credit without borrowing money. These cards are not tied to a bank, so you can avoid their fees. But, according to a specialist at MoneyPug, the popular UK site used to find free UK prepaid cards, you will have to pay a fee to purchase the card and perform other actions.
Without requiring a credit check, these cards can help people who have poor credit to get a card they can use in everyday life and as a way to reinforce positive spending habits. This also enables users of prepaid cards to withdraw money at an ATM, purchase items online, and spend money abroad. Travelers particularly like prepaid cards because you cannot avoid conversion and ATM fees. Although prepaid cards will facilitate the transition to a cashless future, users need to read the terms and conditions to know what they are expected to do and to avoid unnecessary fees.
Fees to Avoid
Each prepaid card is different. To get the most out of yours, you need to pay attention to the fees. While 59 percent of prepaid cards will need to be purchased in the first place, over three fourths of them require a replacement fee if you happen to lose the card. In addition, 79 percent of prepaid cards have a cancellation fee that varies considerably and 85 percent have a renewal fee. Some also charge you if the card is dormant.
While there are some fees involved, prepaid cards help you avoid credit interest, debit account fees, and other needless bank fees. If you pay attention and read about the prepaid card you are going to get, they can help you move into the cashless future.