Why Prepaid credit cards?
9% of the U.S. population
do not have bank accounts

FROM USA Today's Article titled:
Wal-Mart to offer prepaid payment cards

I was talking to somebody in the U.S. who was looking for an "instant prepaid credit card". This means that they could set up the account online, like paypal, add cash, and then be able to use it within minutes.

I was curious and did a search which lead me to the article about 9% of the U.S. population not having any bank accounts. I can only think that Canada would have similar numbers.

According to this article:
A survey by the Federal Reserve shows that these "unbanked" consumers prefer not to deal with banks or feel they don't write enough checks or have sufficient cash to open an account.

I think that we can safely assume that these numbers don't include children or anybody under the age of majority who can't enter into contracts by themselves.

WHAT DOES THIS MEAN?
People who don't have bank accounts aren't able to save money, don't have any relationship with a bank, assumedly don't have any credit.

It's probably difficult in this day and age for people to not have bank accounts since it's a credit and debit card (ie.. NOT CASH type of system we live in). This means that they would have to carry around all cash with them when they go to the grocery store and to buy clothes and household goods.

For the people who have criticized consumers who shop at Money Mart, payday loan stores, and who are looking for prepaid credit cards.

PREPAID CREDIT CARDS ARE A SAFE ALTERNATIVE?
If you don't have a bank account, a prepaid credit card may be the only way to carry your money with you safely. If you get robbed, or lose the card, I'm sure you can easily get a replacement card. But at least you're not carrying around a wad of cash all the time.

This USA Today article was based on information given by the U.S. Federal Deposit Insurance Corp. I'd be very curious to know the equivalent numbers for Canadians.

The bottom line: for those who have criticized people who use prepaid credit cards, this seems to be a sizable chunk of the market place!