When it comes to children being in control of their finances, it’s very easy for people of a young age to get carried away.
Fortunately for those wishing to learn about finance and manage their own savings, prepaid cards for teens exist as an option for them.
There are no debt fears as there is no credit facility while those using the card are the ones in control – only funds on the card can be spent – nothing more.
As with most things in life though, there are certainly some advantages and disadvantages to having a prepaid card as a teenager.
From having personal control of finances and the responsibility that goes with it, what exactly needs to be considered?
A prepaid card can provide a better alternative for cash as there’s less chance of losing a card compared to notes or coins.
If a prepaid card is lost, a call to cancel it is all that is required, whereas lost cash has likely disappeared forever.
The use of a card can also allow teens to manage accounts online, allowing them to internet shop without running up debts as would occur with a credit card alternative.
It would also enable them to spend money on phone applications without having to worry about whether they have enough funds to pay for it at a later date.
At the same time, teens can also learn about the importance of budgeting and how money must be earned before it is spent.
Keeping control of finances
Meanwhile, the teen in question remains totally in control of their money, without having to rely on a credit card where debts can quickly build up.
Many of the cards for teens also enable parents to check accounts and manage balances, enabling them to keep a watchful eye on any excessive spending.
However, it’s important to watch out for fees associated with using a prepaid card. Some will charge for cash machine withdrawals while others may include monthly usage fees.
Keeping a watchful eye is therefore recommended although the cards still represent an alternative to running up a mountain of debt on an alternative method of payment.
Parents can take some responsibility for teaching their children good credit habits, but it is the children themselves that will ultimately be in control of their actions.
Therefore, the addition of a prepaid card could teach good habits from an early age and help them to be in a solid financial position for the future.