Hi Debt Dummy
I think you mean prepaid Debt Cards. There are a number of companies now on the internet who offer these. Essentially, the Pre Paid Debt card works like a normal bank Debit Card. You can never spend more than is in your account. However, with these cards, you essentially have to charge them up before you can use them.
The advantage of the card is that you can apply for one even if you have a terible credit rating because you are not actually borrowing anything. Therefore, they can be very useful for people with debt problems who can only get a basic bank account which does not offer a debt card as standard. The cards are normally associated with either MasterCard or Visa which means that you can use them in most shops. Also really usefully, you can use them for internet purchases.
The charges you can expect will vary between suppliers. There is normally a joining fee of between £10-£20 and then you will usually be charged every time you charge up the card. You will also pay charges for cash withdrawals etc.
There have been some articles in the press claiming that the cards are expensive. However, they have now been around in the UK for 18 mths or so (in the US for much longer) and so with increasing competition, i believe the charges have been coming down. However, you MUST be careful that you understand all of the charges before you sign up. Ultimately you will need to decide yourself whether the cost of the card is worth the convienience. Ultimately they are always going to be more expensive than the normal debit card you get for free with a standard current account!
Hope this helps
James Falla
Expert in IVA, Bankruptcy and informal Debt Management solutions, with extensive experience of solving personal debt problems over the past 10 years. I am regularly featured on BBC News, Finance Programs and Radio.
Visit my blog at:
http://jamesfalla.blogs.iva.co.uk
