The term “money doesn’t grow on trees” doesn’t seem to resonate well with teenagers. An unsecured credit card is a great opportunity to prove that they can build credit responsibly, but on the flipside it’s an easy way to damage their credit before they hit their first frat party…umm I mean study for their first mid term!
As your teen would say “no worries Dad”! with prepaid credit cards for teens, you can keep an eye on your child’s expenses, while still giving your teen flexibility, and control.
Here are just some of the benefits of using prepaid cards for teens:
Set a spending limit. You can load the card online or by phone. From here you can monitor your teens activity via online statements, and when the money is gone…It’s gone!
Security and Peace of mind. Prepaid cards are much safer than cash, as most companies will refund any unauthorized purchases! In addition prepaid credit cards don’t have overdraft fees or interest charges, so it’s virtually impossible for your teen to get in trouble using it!
Teaches Responsibility. A traditional credit card to a teen is like having a blank check. With a prepaid credit card they will have a set limit, so your teen will need to budget to ensure the funds don’t run dry.
Many parents are using prepaid credit cards in lieu of a cash allowance for convenience, with the added ability to track your teens spending patterns through online statements. This is something you just can’t do by handing over your teens allowance in cash.
All in all prepaid credit cards for teens are a great way to give your child the responsibility and opportunity to handle money responsibly. With regular monitoring, setting limits, and making your teen earn any money that is placed on the card, they will surely be on their way to building a great credit profile!
One great option to put your teen on the right financial path is the UPside Visa Prepaid Card. It allows parents to load funds from their checking/savings account for free, and has a rewards program!