The Case for Prepaid Credit Cards for Teenagers

There is a growing awareness of the dangers of debt and the need to instill good money manageent skills in our teenagers before they leave home. Read how the choice of a prepaid credit card can help.

On the one hand, kids having credit cards should teach them how to budget money and make sound financial decisions about money, but on the other with a standard credit card if they spend unwisely parents and child could end up in big debt! If things go well they learn that if they want something and are responsible enough to work to have it, they can get it now and pay for it later. But, if they overspend the experiment will be curtailed by the parents and the whole experience will be negative.

The solution is to give them one of the prepaid credit cards on the market.

Kids who have no knowledge of the value of money and have never attempted to work on a budget often go to college and get themselves deep in credit card debt. Some friends of theirs will tell them "You will be paying debt off all your life with a house, what’s a few more thousand."

Don’t let that happen to you offspring. Teach them good budget skills now and they will thank you later.

Training media do exist which you might like to look at and show your teenagers. The"Teen Credit Boot Camp", is a financial and credit training presentation for teens and young adults of the hip-hop generation. It is a fast paced Powerpoint and motivational presentation ,which fully engages the minds of youth on finance, credit, real estate and net worth.

Young people mis-spending on credit could lead to a life of unfortunate circumstances because of mistakes in adolescence or to a wealth of knowledge about money learned early, albeit the hard way. If you are in that position already, the best way to settle teen credit card debt is to have the teenager sit down with parents and fill out an application for consolidation, together.

Given the widespread use of credit by teens, the need is greater than ever to educate students starting at an early age about responsible budgeting and the importance of saving, investing, and wise spending practices. This need is being addressed by JA’s latest program for middle grade students, which is called "JA Economics for Success". So what are prepaid credit cards. These provide a 21st century take on a teenager’s spending allowance. Parents "load" money onto the card and can, and should, regularly review their teenager’s spending habits online.

This allows parents to keep track of their children’s account activity, and limit spending. However, be careful how you set this up, and if sharing credit with your teen be mindful of the fact that any late charges and wild spending incurred by them can damage your credit report and result in financial liabilities for you. As with pre-paid cards you won’t get into debt because you can’t spend any more than you have these are becoming more popular all the time. Also, many people prefer to use debit cards themselves for this reason.

Don’t be hypocritical though if you have big debts yourself. IF you give your teens sound financial advice don’t ignore it yourself by spending recklessly and running up your credit. While they may not fully understand what you’re doing, they will notice the kind of lifestyle you’re leading and then quite likely emulate it when they leave your household. A prepaid card though is good, and most also allow you to easily budget what you are spending on cell service. In high-school, a little extra spending money always comes in handy. A few dollars towards your first period caffeine fix, ten bucks for the latest song downloads, and twenty needed for Friday night’s movie and cheese fries with friends.

Your teen will probably then some time also get a first job. Once your teenager gets a steady paycheck, demonstrate how to save and spend. In other words, help them develop a budget. However, parents should also explain the consequences of violating their spending limits. Teens must realize that saving is a way to get what they want or need in the long run. It addresses the ways in which individuals or families obtain, budget, save and spend monetary resources over time, taking into account various financial risks and future life events. Components of personal finance might include checking and savings accounts, credit cards and consumer loans, investments in the stock market, retirement plans, social security benefits, insurance policies, and income tax management.

Our economy is based on our spending like crazy. People are taught to throw away everything if you don’t like it (including people) and just get a new one. To develop a spending plan, have your teen start by listing out all sources of regular income (e.g., an allowance or earnings from a part-time job). Next, have your teen brainstorm a list of regular expenses (don’t include anything you normally pay for).

Individual companies have seen the benefits of prepaid credit cards to families. MSC Cruises, for example, has a solution. This is a new pre-paid credit card for use onboard. It’s available on all MSC ships for use by 12 to 17-year-olds. The best part about the pre-paid card is that parents can manage the amount of money available to the teen and don’t have to worry about an overdrawn bank account. The drawbacks to pre-paid cards are the amount of fees that get tacked on, so parents and teens will want to read the fine print, and shop around carefully for the best prepaid card deal.

Theft protection, which is available on most prepaid credit cards, keeps parents and teens from being responsible for purchases made if the card is stolen. The UPside Visa prepaid debit card claims that it promotes financial independence for teenagers. That alone would terrify many a parent, but UPside offers reassurance. They say that teens will soon be responsible if they understand the problem of debt before they spend. The young can learn about managing money at another educational web site, which is called "spend responsibly.com".

Finally, no article about credit cards should ignore the problem of identity theft. Identity theft is an ever-increasing threat for all consumers, but children and teenagers are particularly good targets for the fraudsters. The Federal Trade Commission reports that young people make up 31% of reported cases of identity theft each year.

As regards prepaid credit cards for teens information and regardless of how much you think you are aware such as articles about prepaid credit cards for teenagers , or even credit cards prepaid , see Steve Evans’s website and blog to be entertained and informed with truly top information.

Check out my other guide on Can a Credit Card Company Sue You

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