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Prepaid Cards for Teens – Establish Responsible Spending Habits

08.25.2009 · Posted in Home and Garden Articles

The idea of giving credit cards to teens is a controversial topic. Many experts and parents are ambivalent about the benefits of taking such a step. The question is, are the teens ready to handle such a big responsibility? But their convenience makes it very tempting. There is a solution to this dilemma. Using prepaid cards for teens is an ideal way to put a credit card in the hands of teen and still maintain control of the situation.nnLet us first establish the difference between credit cards and prepaid cards. Credit cards, as their name implies, offers consumers a line of credit that they can tap into. The cardholder is basically borrowing from the credit card issuer agreeing to pay them back within the billing cycle or to at least make minimum monthly payments including interest until the debt is paid off.nnConversely, prepaid cards do not offer credit at all. You are actually tapping into your own money that has been deposited by you. You are allowed to access whatever funds that are available up to the amount deposited, but nothing more. Additional funds can be added at any time. There are no credit checks necessary to be approved for prepaid cards.nnThere are synonymous terms that people commonly refer prepaid cards for teens as including preloaded cards and debit cards for teens. These terms are usually used interchangeably to describe the same thing. Some prepaid teen cards also have parental controls that allow parents to monitor the spending activity of their children. They can also make deposits to the card as well.nnThere are some basic similarities between prepaid cards and credit cards that make them advantageous for use by teens. They work exactly the same as a credit card and can be used wherever a credit card can be used. It allows them to make purchases online, over the phone or at stores, gas stations, restaurants and the like.nnOne of the biggest advantages to prepaid cards for teens is that they can be used at an ATM. Therefore, the teen has easy access to cash in an emergency situation. Money can be added by the parents quickly if needed so even if the teen is stranded somewhere out of reach, the parent can’t provide them with the cash they need.nnThere are fees involved with using prepaid cards for teens. Some cards charge an annual membership fee, while others will charge a monthly fee. There can also be nominal withdrawal fees and fees for monthly statements if you choose to have one sent to you. There are however, no inactivity fees.nnBe sure that you carefully read the terms and conditions set forth by the issuer of prepaid cards for teens so you fully understand the fees, terms of service and the way it works. They do differ depending upon the issuer. Prepaid cards for teens are an excellent way to teach financial responsibility to teenagers without having to worry about going into debt or paying interest rates.

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