What You Need to Know about Prepaid Debit Cards for Teens

Prepaid debit cards for teens

MLMFB.COM - Getting prepaid debit cards for teens is important. It can train your teenager financial responsibility. Teach your teenagers how to be smart with prepaid cards without the temptation of reckless spending.

The prepaid card, such as debit card, does not have the number of fees needed to get a credit balance. Prepaid cards also do not have a minimum age limit and do not require a credit check. Therefore, prepaid cards can be a good stepping stone for your teenager to understand it. Your teenager will understand how to manage the expenses on a prepaid card before applying for a credit card when they are eligible. Therefore, you as a parent, it is very important to know about prepaid allowance cards for teens.

Prepaid Debit Cards for Teens as Alternative Choice

This is an option for those of you who do not want to have bad credit that will damage the credit history of your teen bank account. Prepaid debit cards can give the experience of having a credit card to your teenager, but without having the danger such a real credit card.

To get a prepaid debit card, you can simply buy it from the store or register online. After you register, you then fund the card through online or telephone transactions. How much you have to add the card is varies. After funded, you can set the PIN number and then hand the card to your teenager. You will receive a statement similar to a credit card. You can also cancel the card or even change funds if it is stolen or lost.

The Advantages and Disadvantages of a Prepaid Debit Card

Before deciding to make a prepaid debit card for your teenager, it is better to know its advantages and disadvantages first. As a lesson to teach them about financial responsibility to use, there are many reasons to register your teenage a prepaid debit card. Here are as follows:

  1. It can be used online.

    Most teens now have online accounts for everything such as for playing the game, socializing, and to buying books. But, you do not need to worry your teenagers will use prepaid debit cards to just play games and so on. Using a prepaid debit card allows you to control how much they spend and what they buy. If your teens have a smartphone or tablet, prepaid debit cards allow a personalized online ID. It allows them to facilitate spending on games, applications, and other media without relying on your debit card.

  2. It will be safer.

    When your teen goes away with cash, sometimes it makes you worry that the money will be stolen or lost. But, by using a debit card, it will be safer because you can call and cancel if something bad happens.

  3. It will be a valuable lesson.

    By giving them a debit card, that means you teach them about budgeting. The system on prepaid cards is to have money first before spending it. Your teenagers think that when they want something, they must have a budget that is enough before buying it. It is a valuable lesson that they must be difficult first before they are happy. They will feet that behind the happiness there is a sacrifice. So, they will learn to save and be thankful.

  4. It can be controlled.

    A prepaid debit card can make you control how much your teenager is spending. Most of the prepaid debit cards require the authorization and access from parents. So, you can check you teenager’s balance and shopping history. Therefore, you can teach them more about budgeting.

Although prepaid debit cards give your teenager lots of lessons, there are other things that you need to pay attention to. Here are some potential pitfalls that you should know before deciding to give them a prepaid debit card or not.

  • Costs can increase.

    Cost is how companies make money from prepaid debit cards. For example, there are fees for activation, monthly usage, and even ATM fees to withdraw cash. Fees range from $ 1 to $ 3 for ATM withdrawals. And then, it is  $ 5 to $ 10 for monthly usage fees.

  • They have no effect on credit.

    If you want to use a prepaid debit card to increase your teen’s credit score before continuing into college, you can forget it. Prepaid debit cards are seen as the same as bank accounts by the credit bureau. It does not count as a loan or credit card. Teenagers can spend with their cards, but will not show credit scores.

  • It will be a difficult transition.

    When in the end they switch to credit cards, it will be difficult for them. They are used to having to have money first before buying. When they switch to credit cards, they will see the credit limit as free money to spend. They also will not get used to pay back the amount charged by the credit card company.

3 Debit Cards for Teens You Can Choose

To help you find the most appropriate one, below are 3 debit cards for teens as your options:

  1. FamZoo Prepaid Debit Card.

    FamZoo provides parents and teens with access to debit cards. Money can be transferred between accounts repeatedly. FamZoo also gives parents the ability to lock and unlock cards either to control access or as an extra security. FamZoo does not charge fees for re-loading and no direct deposit fee. Monthly subscription fee per family is $ 5.99.

  2. Mango Visa Prepaid Card.

    This card is equipped with a savings feature on money in their saving accounts. Mango Visa Prepaid Card is free of charge for registration, activation, or loading funds via bank transfer. This card has minimal costs. It is only $ 2 to withdraw from an ATM and $ 3 as a monthly fee.

  3. American Express Serve .

    It has more than 45,000 locations for refill network throughout the country. Although there is a monthly fee of $ 4.95, there is no fee for card replacement, sub-account, customer service, or ATM withdrawals. This card can also be obtained for free if you order online or $ 3.95 when purchased from a retail location. Other freebies are online bill payments, fraud protection, and first direct deposit.

Give prepaid debit cards for teens can be a good way to start learning how to budget, save, and spend responsibly. But, still teach them, and you must keep monitoring them directly or indirectly.

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