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BOS subsidiary Halifax has criticised new pre-pay cards aimed at consumers
without bank accounts, claiming users would be better off opening basic banks
accounts.
Pre-pay cards are marketed as an answer to financial exclusion by providing a
means of payment in shops and online to those without bank accounts.
But Halifax claims the cards have limited functionality and charge consumers
regular fees that can be avoided by taking out a basic bank account.
Pre-pay cards can carry a variety of fees and charges.
Many have to be purchased and can then charge up to £ 15 every time they are
loaded with cash.
Charges can include card purchase fees, usage fees, annual renewal fees and
withdrawal fees.
Halifax uses the example of a prepaid Maestro card, which charges up to £ 3 for
every £ 100 credited, potentially costing the cardholder up to £ 72 a year for
loading an average of £ 200 per month.
"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,"
said
Paul Marriott-Clarke, head of banking at HBOS, commented: "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."
Source:
Getting Paid
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