While most experts would agree that giving credit cards to teens may not be the greatest idea in the world there most definitely is a viable solution in the form of prepaid cards for teens. Prepaid cards offer many advantages including having the ability to set spending limits while teaching youngsters how to manage their finances responsibly.
Let 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.
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.
These prepaid cards for teens are also sometimes called “preloaded cards” or “debit cards” but there isn’t much difference between any of them. Different prepaid cards have different monitoring options depending on the set up of the card and the institution that issues it. Sometimes a parent can actually monitor their teen’s use of the card and see where the money is being spent.
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.
Probably the most sought after function that teens and parents are looking for in prepaid cards is the ability for the teams to access cash through an ATM. These cards can make it very easy and convenient for the teens to do just that. It is extremely easy to add additional money to the account which makes this card ideal in case of emergencies.
There 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.
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.
See for yourself how prepaid cards for teens teach responsible spending habits. There are a great many benefits for using prepaid credit cards for teens that must be taken into consideration as financial management tools.
Tags: Celebrities and Credit Cards, Credit Cards, Debit Cards, loadable credit cards, Money, preloaded cards, prepaid cards for teens, prepaid credit cards for teens, teen credit cards, teen debit cards