At a young age, many people have very little concept of monetary value, as this is often developed during their teenage years.
Pocket money, allowances and paper rounds can all produce spending power, but teaching children what to do with their money remains essential.
Given that financial education will soon be a part of the curriculum in the UK, the basic understanding that is currently taught is set to be developed to an even greater extent.
Learning the important of finance
Teens could therefore benefit by getting their hands on financial cards – as they can learn from a younger age what all the financial related terminology actually means.
They can grasp the concept of ‘saving in order to spend big’ and can realise that it is not possible to purchase everything that they might like.
Invisible finances – those transferred via cards – mean the true value of something is harder to showcase as the children do not see anything physical changing hands.
This can create the concept that the goods being purchased are not actually costing anything – although money is transferring from one account to another.
Why a prepaid card for teens can help
Helping to develop understanding is an essential part to children remaining debt free should they get credit cards in the future – and that’s where a prepaid card comes in.
It represents an opportunity for parents to give their child control of some finances and to be able to monitor how they go about spending them.
At the same time, it’s impossible for teens to rack up debts as only the money on a card can be spent – it can however be topped up if necessary.
Prepaid cards function in a similar way to debit cards – they can be used in retail outlets to pay for goods, as well as online, while money can also be withdrawn via ATMs.
Safe and controlled spending
As a result, prepaid cards for teens are deemed as a safer solution when compared to a card that could see them rack up large debts and interest payments.
Many cards also have additional features that mean that both parents and children can have a relative degree of control – some offer spending alerts via text messaging while low credit limits and no monthly fees prevent any unexpected expenditure.
For teens who already make their own spending decisions and who manage their money wisely, a prepaid card could represent a way of welcoming them to the world of plastic finance at a slightly earlier age.
