While many American consumers are getting fed up with banks or simply refuse to do business with a large financial institution, they sometimes have a difficult time getting access to much-needed money. But prepaid cards are an alternative finance
option, and the use of them is on the rise.
A recent report released by Mercator Advisory Group found that in 2011, consumers who used prepaid credit cards loaded approximately $57 billion on the plastic products, according to the Nashville Ledger. This number is expected to increase by 42 percent year-over-year through 2014. For 2012, the amount is anticipated to rise to $82 billion. Many alternative credit
businesses are now offering prepaid cards to consumers in order to tap into this large market. Another report, by Packaged Facts, found that prepaid card volume will increase 22.4 percent this year, according to The Street. Researchers say this is because consumers are increasingly turning away from banks and looking to alternative finance companies, such as short term lending
businesses. "Consumers dissatisfied with their consumer banking experience are natural targets for emerging prepaid programs," said Packaged Facts publisher David Sprinkle. "If a given prepaid card product functions much like a checking account but without the fees, consumers disgruntled with fees and practices applied by their banks may very well try it."