A growing number of America’s unbanked and under-banked consumers have been turning to prepaid debit cards as an alternative to checking accounts. Between 2003 and 2012, the total amount of money deposited annually onto these cards increased from $1 billion to $65 billion, and that amount is expected to near $100 million for 2014. But those cards often come with hefty fees and lack protections of other financial products.
All around the country, new and returning college students are being handed IDs they can use as debit cards or they’re being told they can have their aid disbursals deposited straight onto a school-branded card. It all seems incredibly convenient, especially for those who have limited experience handling their own finances, but these school-backed banking products are rarely the best available options for students, who could end up being nickel-and-dimed into debt.
Attitudes towards debt on credit cards began to change long before the financial crisis, according to The UK Cards Association.
In a new report, the trade body tracks the shift in spending and borrowing on plastic from 2000 through 2010, labelling the period “a decade of two halves”.
From 2000 to 2005, banks and other lenders recorded strong growth across all forms of card use in the UK, followed by a “sharp retrenchment” thereafter in the use of credit cards.