July 14, 2008
Teach Your Kids With A Prepaid Credit Card
By Mei Wertz
Kids are getting more independent. Parents then have to be more aware of what their kids are doing.
This includes who they are spending their time with and what they are spending their money on. Money is usually a common topic of discussion between teenagers and their parents.
The kids will want complete freedom on how they spend their money and their parents want to be sure that they do not anyhow spend their money.
Prepaid card is a great tool to to educate them.
When most of us think of credit cards we think of adults in a stable job who can maintain their payments. The type of card that is suitable for a teen is very different.
Credit cards for kids are actually pre-paid and that means that the child can only spend as much as is put on the card by the parent.
If the child has a monthly allowance, the parent can then add the amount of the allowance to the card once a month and the child then uses it until the balance is at zero.
Such prepaid cards are widely accepted in most outlets as they are either Visa or Mastercards.
The nature of the card allows the kid to understand the concept of balancing their budget.
Since they can only use the amount that is designated to the card, theyll quickly discover that overspending isnt a good thing.
Children with prepaid debit cards tend to be more frugal with their money than those carrying cash in their pocket.
Such card proves to be a good platform to introduce the kid to the world of personal finance.
There is no danger of credit damage since prepaid card does not have credit rating.
Prepaid card teaches personal finance value which everyone should learn.
Topics: Credit |
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