Pre-pay cards have "limited functionality"
Published On 9 November 2006
The new trend for pre-pay cards aimed at people without bank accounts suffers from "limited functionality", according to one leading UK bank.Halifax, the country's leading provider of social bank accounts, has said that despite being billed as an answer to financial exclusion for those without bank accounts, pre-pay cards suffer in reality and charge their holders regular fees.
The group says pre-pay cards carry a variety of fees and charges, which can add up as an unnecessary expense for those who are trying to save money.
Among the charges consumers could experience with a pre-pay card are; card purchase fees, usage fees as a percentage of each transaction, annual renewal fees and ATM withdrawal fees.
Halifax offers a basic bank account in the form of its Easycash product, which provides consumers with a combined ATM and Visa Electron Debit Card, Post Office counter access, free online and telephone banking and the ability to shop online at stores all over the world.
Paul Marriott-Clarke, Halifax and Bank of Scotland spokesman, said: "Pre-pay cards may seem like the answer for someone without a bank account but they can be very costly even for just a few basic transactions every month. A basic bank account, such as Easycash, is by far the better option for those who have struggled to get a bank account previously.
"They are free, have more facilities and offer greater protection against losses. They add up to a much better deal than a pre-pay card."
