During the economic downturn, many people are looking to consolidate debt and reduce their spending with some turning to prepaid cards for help. And according to a recent study, the amount of money being loaded on those cards is rising.
The report from Mercator Advisory Group finds that the amount loaded on both closed loop and open loop cards increased from $220.3 billion in 2007 to $247.7 billion last year – a 12.4 percent rise.
It seems that an increasing number of people are turning to these cards as a way to spend money on items and services they use regularly. The report finds that a number of types of closed loop cards – those that can only be spent at a specific store or business – saw big increases over the last year.
For example, cards used for digital media saw a 24 percent increase while cards in the petroleum sector saw a 23.2 percent rise over the year.
In fact, it appears that the rise in the popularity of Apple’s iTunes store has had a big impact on the prepaid card industry. According to the report, the digital content category increased 17 percent in 2008 to $8.04 billion. Of that segment, digital media saw some of the biggest increases with 24 percent growth.