Prepaid cards for teens :: Teach your children proper budgeting
|March 21, 2011||Posted by derek under Credit Cards|
We actually live in the epoch of financial issues. In fact, it’s almost impossible to imagine our world with no money in it. Besides, our kids follow the current progress willingly and due to the peculiarities of their age, they need to feel freedom, especially financial.
It’s not so bad as this period of life is the right time for teaching teens budgeting tips and prepaid credit cards can become a great tool to fulfill this purpose.
Another tool for your financial toolbox
Most parents don’t like the idea of giving their children traditional credit cards as they are afraid of overspending. Thus, credit card companies designed particular prepaid cards for teens which are aimed to teach kids dealing with money and credit being responsible.
The way these prepaid cards work is rather simple. Parents can load a particular amount of money that they deem appropriate for a teenager during one month, for instance, and then monitor the child’s spending by calling to the credit card company or with the help of online statements.
Safer than cash?
Actually, some experts consider these prepaid cards safer than cash because most credit issuers guarantee that the parents can be refunded for unauthorized purchases. In addition, the child won’t be able to spend more money than the parents have loaded. Moreover, even relatives can put money on the card for a teen instead of sending a check or just giving cash that can be wasted at once.
As for the teens, they will have more opportunities as having a prepaid credit card will allow making purchases online that are impossible with cash.
The major credit card companies, including Visa and MasterCard, offer prepaid cards for teens. As a rule, there are no overdraft fees, no interest charges or late fees. Thus, this financial option can become a really great tool for teaching budgeting tips.
However, it can become harmful without strict measures set for your teenagers. As an example on how to manage the prepaid card, load the desired amount of money each month in order to teach your kids efficient budgeting. Also, monitor your child’s spending carefully and discuss every purchase explaining whether it’s essential or not. Some parents may find it to be useful to make their children work for the card by means of doing some chores, for instance.
Great tool when used wisely
In fact, prepaid credit cards can be not only a good teaching tool, but also a great gift for teens. If your children will get prepaid cards, they will feel more adult and it’s really important for them to obtain a kind of financial freedom.
Don’t get too concerned if your child won’t manage proper spending right at the beginning. Be patient and try to explain every mistake. No one is perfect, but it’s better to make mistakes now at a young age in order to avoid the same errors as an adult.
Valery Thomson is a financial copywriter being occupied for the website providing payday loans online and she is eager to share her knowledge and experience concerning various financial issues.