How a prepaid card can be the best Christmas card

Even in a digital age, many people love to receive Christmas cards, but while good wishes for the season and the new year beyond may be welcome, a card of a different kind – one that helps to manage money – could do much more to ensure a happy new year.

Overspending on plastic is a major problem for many people, with the threat of January bringing not just the switch-off of lights and the disappearance of the tree and tinsel, but also a major headache when the bills start arriving.

A recent survey by M&S Money identified how poor some consumers can be at managing money when Christmas is approaching. It found four people out of every ten fail to set a budget and of those who do, 46 per cent fail to stick to it. Many people run up debts by purchasing items impulsively – with men the biggest offenders.

Paul Stokes of M&S Money commented: "The earlier you can plan ahead for Christmas the better, particularly when it comes to saving, but it's never too late to make a budget to help with your finances over the festive period – a shopping list is a great way to help you keep within budget."

Managing money sustainably matters at any time of the year and a budget planner will always be useful, but efforts to keep Christmas spending under control can also be down to the kind of credit card used.

Samuel Mond, Director of Prepaid MasterCard ClearCash comments: "Christmas can be one of the most expensive times of the year and with the current economic climate, that present list will surely be even more of a squeeze on the finances.

"A possible solution for the yuletide woe is to use the ClearCash PrePaid MasterCard. By simply spending only what you load onto the card, you can set yourself a more successful budget and could avoid breaking the bank before 2012."

A prepaid MasterCard may be the ideal solution, because the amount that can be spent on it at any time is limited to what is preloaded. This means the holder is always conscious of the limited amount they can spend on it – making them think twice before making impulse purchases.

A low introductory interest rate may help keep repayment costs down, but a prepaid card may be even more effective, by not allowing as much debt to be created in the first place.

Discussing this benefit, Claire Dudley-Hodson of MasterCard explained: "MasterCard prepaid cards are accepted anywhere you see the MasterCard sign and work in much the same way as a pay-as-you go mobile phone in that if you load £50 onto the card the maximum you can spend before reloading is £50.

"This makes it a great option for anyone looking to ensure they do not overspend this Christmas and, as there is no line of credit created and no overdraft to dip into, no one with a prepaid card is going to wake up on Christmas morning with worries about how they now pay for their unintended shopping spree."

So with the right card, Christmas can be much merrier, in the knowledge that there will not be a nasty bill on the way to ensure anything but a happy new year.