Prepaid Cards for Teens – An Effective Money Management Tool for Teens
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.
There are a few essential differences between a prepaid credit card and a credit card. Most of us use credit cards exclusively and understand that they are actually a credit line that is extended by a bank or lender. The amount is predetermined based on your credit history and your own preferences. The money borrowed when used via the credit card, must be paid back in full with interest on a monthly basis.
Conversely, 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.
Some people call prepaid cards for teens “preloaded cards” or “debit cards”. They are all pretty much the same thing. Different cards provide different options for parental monitoring and control. A parent, in some cases, can monitor how and where their teen uses the prepaid card. Additional funds can be added to the card.
Prepaid cards have the same advantages that credit cards have when it comes to spending, as long as the teen stays within the limits of the amount deposited. They can be used wherever a credit card is used, online, in stores, restaurants, etc.
Prepaid cards for teens can provide them with access cash from an ATM. This is very helpful to parents and teens alike. These cards offer an ideal option for use in emergency situations. It gives the teen access to money and parents can deposit money whenever necessary. As a parent, you don’t need to worry about your teen running into a problem and not having enough money.
Prepaid cards for teens do have fees associated with them. Ordinarily an annual fee will be charged and/or a monthly fee. There is often a fee for each withdrawal. If you want to receive a monthly statement there may be a charge for that as well. If the card is inactive, there is no charge.
Be 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.