Prepay helps with budgeting, says card company

A new pre-pay card which is set for launch can help people budget and be a "convenient and secure" way of paying with plastic, according to one card company.

Tuxedo will be involved with introducing the cards into the UK - they are said to be very popular in the US - along with partners in the project the Sun and Newcastle building society.

The simplicity of a pre-pay card and the advantage of not borrowing money - the card is topped up in the same way as a phone or travel card - has been highlighted by Tuxedo as helping those who wish to budget.

"This is absolutely for them because they can spend money they have and they don’t have to incur credit exposure. They can use it to budget according to their ability," said Mark Simon, chief executive officer of Tuxedo.

"There is no credit involved and as a result there is no risk of going over drawn and there is no risk of incurring credit costs," he continued.

Mr Simon went on to point out the added re-assurance that could come with using pre-pay.

"It provides you with personal security - you don’t have to carry cash and if the card is lost then we will replace the card."

PayPass, which is a quick touch method of paying with a credit card, was introduced in selected stores at the start of the month.