Pre-paid card aims to help the hard-up with lower fees and charges

Pre-paid plastic cards are growing in popularity, but can prove expensive. They’re proving popular particularly among people who can’t access mainstream finance as, because they’re Visa or Mastercard backed.

That gives users the opportunity to shop online, a convenience that may be otherwise unavailable to them.

But with many of the cards costing up to a tenner to open and charging fees when uploading cash or even withdrawing it, hard-up folk can soon discover the cost of using the plastic can soon outweight the convenience.

Today pre-paid card company Pockit says it hopes to shake up the market by launching a card that is free to load online and spend anywhere in the UK and which does not charge for account dormancy or cancellations.

Its new Prepaid Mastercard does cost 99p, and charges 99p for ATM withdrawals or to load cash at PayPoints. But the company claims anyone using the card will pay just £32 a year in charges compared to the industry average of £132.50.

“The prepaid card market is a minefield for consumers with a confusing array of different charges to consider,” says Andrew Hagger of Moneycomms. “Many of these cards charge between £5 and £10 as an application fee as well as fees for both purchase and cash transactions.

“The Pockit card charges 99p for each ATM withdrawal so it’s not ideal for those who withdraw often,” Mr Hagger points out. “But with no dormancy fees or card cancellation fees buried in the small print it’s a decent all-round card, especially as you can earn cashback too.”