Prepaid credit cards for teens are a great way to teach budgeting to a child without giving them the keys to your lines of credit. A prepaid credit card can be used to purchase items in the same way as a traditional credit card. They also make great gifts and can be saved for emergencies.
Teaching Teens to Budget
Prepaid credit cards for teens are a great way to teach children how to manage their money. By loading a credit card each month with an allowance, parents can help guide a child's spending habits in the right direction. This can help older teens avoid a common pitfall: multiple lines of credit that cannot be managed in college.
Prepaid Cards as Gifts
Prepaid credit cards make great gifts for teens. While giving cash is always acceptable, giving a teen a credit card can make them feel a little more adult. A teen can use a prepaid credit card to pay for things on the Internet; something they cannot do with cash. These handy cards can be used to download music, purchase Internet games or be used for website subscriptions.
Gift credit cards can also be used to reward a great report card, as a graduation gift or as a thank you for a job well done.
Managing College Expenses
A prepaid credit card is also a great tool for helping college students manage their expenses. A parent can provide their college student with prepaid cards to help pay for books, gasoline, groceries, dorm items and take-out food. For students that haven't had to budget their money before, managing a card with a pre-set spending amount can help them spend their money wisely.
Benefits of Prepaid Credit Cards for Teens
There are many benefits to prepaid cards. The following benefits are the most commonly cited reasons for purchasing these handy cards:
- They are easy to purchase and can be found in many retail locations
- They give teens the power of a credit card without giving them access to their parent's line of credit
- They can be used anywhere Visa or MasterCard is accepted
- Some prepaid credit cards can be re-used
- Some prepaid cards can be re-loaded from other locations - this is helpful for parents who live in one state and who have college students living in another
- They teach teens to budget their money - they cannot spend more money than is available on the card
- Some of the prepaid card issuers are now offering to replace money on the card if it is lost or stolen
- They offer an emergency funding source for teens to keep on hand
Where to Find Prepaid Credit Cards
Many prepaid credit cards can be found in your favorite retail stores, and they can be paid for at checkout. You may also find these types of accounts online. The following businesses sell prepaid credit cards:
- Walgreens - Sells Green Dot MasterCard and Visa prepaid cards.
- UPSideClear - The re-loadable prepaid card with no transfer fees. Parents can load additional funds via the Internet with no fees charged for the service.
- MasterCard - Buy prepaid credit cards directly from MasterCard on this site.
- Green Dot Online - Purchase and manage your Green Dot MasterCard and Visa prepaid cards here.
Consider a Prepaid Card for Teen Expenses
Prepaid credit cards are perfect for teens for a variety of reasons. From gifts to helping a child understand how to manage their money, a prepaid card is convenient and educational. Prepaid cards can be used to purchase items on the Internet, buy gas in an emergency or simply to purchase favorite items at the mall. Prepaid credit cards offer the convenience of a credit card without the application fees, finance charges and annual fees.