Credit cards are widespread across the globe, and most adults in the UK have credit card debts. According to latest surveys on personal debt, every family now has around ?40,000. Of course, this does not mean that every household has that amount of debt, yet indeed the levels are high. Credit cards are a large part of regular consumer debt although they are becoming harder to apply for.

Since the financial downturn and the new approach by the government to sort out Britain’s debts, financial institutions must abide by far stricter regulations regarding borrowing products. The previous government is frequently accuse for the severe situation in the country, with economic problems comparable with suffering Eurozone nations.

So, should people take a new credit card when they know that they already have debts to manage? In reality, credit cards are massively vitalfor many aspects of everyday life: large purchases such as cars and property are only possible with the aid of plastic money. Many online firms solely accept credit cards, as do hotels. Many establishments do not even accept debit cards – therefore, what choice do consumer have?

Fortunately there are masses of types of credit cards, ranging from prepaid cards to luxury cards and business cards. The choice is vast, so the majority of people have an option. For example, the individual who has difficulty receiving a loan or other personal credit product at a mainstream bank may now apply for a low credit credit card. This type of card usually has a small credit limit, but awards the card holder more purchase power and in many cases there are additional features like a credit rebuilder. This is designed to help the card holder repair their credit score, although the risk of more debts is always present.

Prepay cards are growingly popular in the United Kingdom, and offer the ability to make purchases online and globally with what seems to be a classic credit card. They are even provided by one of the main credit card companies like Visa. However, rather than offer the card user a borrowing facility, the card may only be loaded with funds. Once these have been spent, it is up to the card user to re-load the card with more funds. The principle draw of this is that the card user doesn’t risk ending up debt, as it is impossible to borrow using the card. On the other hand, there are a couple of drawbacks. For example, most prepaid cards do carry some charges such as purchase fees or monthly administration fees. These are usually paid for with funds on the card.

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