Should Your Teen Have a Prepaid Visa Card?
A Prepaid Visa Card for Teens
MasterCard and Visa both offer prepaid debit cards geared toward kids. If you’re a parent, then you might be interesting in learning more about prepaid debit cards for kids. MasterCard and Visa both have kid-friendly options, but first you’ll probably want to know more about them.
Kid-Friendly Credit Cards?
The kid-friendly options are geared towards preteens and teens. Both the MasterCard and Visa options sport colorful, kid-friendly designs. Deciding whether or not they are right for your children is based on many factors.
If you’re concerned about your teen’s ability to handle the responsibility of a credit card, you should proceed with caution. How long have you given your teen an allowance? How well does your teen manage his allowance or the money he receives on birthdays and holidays? These are good questions to consider before you hand your teen a prepaid Visa.
Watch Those Fees
There is usually an activation fee associated with a prepaid debit card. You’ll also likely have to pay a fee each time you add money to the card. However, a prepaid Visa can be a great way to provide your teen with a taste of how credit cards work. Keep in mind that in a few years if your teen goes off to college, he or she will easily be able to apply for a credit card without your permission. Your teen can end up with more serious financial problems later unless he learns how to manage money now, and prepaid debit cards can help teens learn money management skills.
Before you get your teen a prepaid Visa or MasterCard, you should both agree on just when and how your teen can use the card. If your teen exceeds the limit you’ve put on the card and your hit with fees, you should require your teen to pay those fees off no matter how long it takes.
Some Other Considerations
Another way to teach your teen about credit without actually giving them a prepaid Visa is for you to loan your teen money when he or she wants to purchase a particular item. If your teen borrows $25, give them a particular period of time before you “charge” them interest. Then after that date if you haven’t been paid back, begin calculating interest. This can be a great way for your teen to learn about how credit cards work.
A surprising number of teens (more than you can imagine) will be able to handle a prepaid Visa card, so you might consider giving your teen one. The added convenience of a prepaid Visa card will mean that your teen doesn’t have to carry too much cash when out with friends.