The latest way to spend our money is a method known as pre-paid credit cards. Imagine a pay-as-you-go mobile phone sim-card or a London Oyster card, where you can only reap what you sow and only spend what you have. The credit card is unlike any other on the market as customers can’t rack up debts. The idea is to grant people who are unable to open bank accounts or be given credit cards for various reasons (often for mismanagement of their funds) access to a plastic card.
Tuxedo are a company affiliated with Mastercard and offer this service, also working alongside Newcastle Building Society. Tuxedo have also recently teamed up with The Sun newspaper to launch this pre-paid to all of its readers. Chief Executive of Tuxedo, Mark Simon, said, “The reason we looked to The Sun is that they have a very loud voice in the marketplace and can help probably more than any other media to explain this product to their readers.”
The pre-pay cards work out slightly more expensive than other credit cards (sometimes deducting around 3 pence for every pound in a transaction) but have the immediate advantage of customers being unable to rack up debts and are available to anyone. By the end of spring 2008, the plan is to have over 2000 high street bank branches offering a free ‘top-up’ faculty in their branches as well as in shops, by direct debit or via their work salaries.
The Sun will heavily promote the card in its newspapers and on its website and it will tempt its readers with a free £5 starting credit on their cards. The marketing campaign is thought to be costing The Sun £1 million over the next year. This might have something to do with the fact that other newspapers and publications have beaten them to it.
The Daily Mirror launched an identical service back in November 2006, partnering with a similar company to Tuxedo called Quidity. The card is Maestro / Switch but offers exactly the same service. Quidity has the added incentive that, similar to a supermarket points card, when customers use the card on a purchase at certain affiliated stores (for example, M & S, Dixons, Tesco) they then earn cashback for their purchases.
Virgin Money also launched a similar card in July 2007, which is affiliated with Mastercard. Even the magazine FHM, the media sport group Talksportand the record label-cum-nightclub The Ministry of Sound have similar pay-as-you-go credit cards. Considering such shifts, it seems that our paper money under the mattress has been replaced with a plastic sheet.
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