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Prepaid cards becoming popular for consumer use

Nov 27, 2012 Sean Albert

Shoppers are expected to spend more in the next few months compared to 2011, according to multiple reports, and alternative credit payment methods may play a major role. "The card is helpful for families with financial issues because of the ability to direct deposit paychecks and the simplicity of the $5 monthly fee," said Fred Solomon, a spokesman at PNC. The FDIC recently predicted that one in four U.S. households are either unbanked or underbanked, according to CNBC. As a result, many people are turning to methods like prepaid debit and gift cards. Alternative credit debt collection agencies could see an influx in business in the near future, as a recent report by the American Bankers Association and the Mercator Advisory Group found that prepaid cards are rapidly gaining in popularity. According to the survey, 58 percent of banks either offer or plan to offer prepaid cards, with 85 percent of respondents claiming they view prepaid solutions in a favorable light. Many banks offer a monthly fee of just $4 to $5 for prepaid cards, which is among the factors that make these payment methods popular.