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"Would you be more confident shopping online with a prepaid card?"

By admin | March 24th, 2009 | Featured

For many people the thought of shopping online has become something of a daunting and nerve-racking one, not because they don’t know what they are doing online but because of the sophisticated means by which fraudsters have started to carry out credit and debit card fraud.

Nobody wants to become the victim of this type of fraud, particularly in the current financial climate, and it is therefore little wonder that so many people do not have the confidence to shop online using their credit and debit cards.

In fact, recent research was carried out that showed how more than half of the population had become so concerned about becoming a victim of credit and debit card fraud that they would no longer shop online. The survey also showed that around one in every three people that was polled knew someone that had already been the victim of credit card fraud, and with this type of fraud having rocketed over recent years many were simply too nervous about becoming a victim themselves.

However, there was a suggestion that those who are too nervous to use their credit and debit cards online may be able to benefit from using a prepaid credit card. These cards have become more well-known over recent years, and in many cases have been used for people who have bad credit and cannot get a standard credit or debit card. They have also been used by parents who want to give their kids a limited amount of money to keep on them but do not want them to have to carry cash around.

The way in which these cards work is that the money is loaded onto the card by the cardholder, in much the same way as money is paid onto a prepaid mobile phone. The cardholder is then able to spend on the card, using it to make payments in person, online, and by phone, like a normal credit or debit card. However, the amount that can be spend is the amount that is loaded onto the card, so once that is gone the card can no longer be used until it has been loaded with credit again by the cardholder.

Industry officials have suggested that for some consumers these prepaid cards may be a more secure and reassuring way to shop online, as the risk of becoming a victim of fraud and suffering huge financial losses is far lower than with a traditional debit or credit card.

One official stated: “Prepaid credit cards allow such people to be part of the modern day ‘plastic culture’ which allows you to take advantage of online shopping discounts as well as access to hugely popular sites such as eBay.”

Another official said: “The risk with a credit card is that the fraudsters will be able to max out your card, where a prepaid card is almost like a pay-as-you-go mobile phone. The only money that can be stolen, is the money you have loaded on. And unlike a debit card, a prepaid card does not have any link to your bank account or address, so the chance of fraud is next to none.”

Tags: credit card fraud, prepaid credit cards

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