Handing your teenager a credit card is a lot like handing over free money…But it doesn’t have to be. You can monitor your child’s expenses and allow your teen a little control and flexibility. With a prepaid credit card, your teenager can spend freely up to a point. Unlike regular credit and debit cards, you can’t go over the spending limit, and when the money is gone it’s gone.
How prepaid cards work:
- You can load them with however much money you want. Then monitor your child’s expenses with online statements, or by calling the credit card company. You can reload the card either online or by phone.
- Prepaid cards are safer than cash, because most card issuers guarantee you’ll be refunded for unauthorized purchases. If you’re worried, don’t put a large amount of money on the card at any one time. And safeguard your PIN number. Also be sure to change it often.
- Relatives can put money on the card, instead of giving cash or sending a check. You can authorize family members to add money to the card any time.
Credit card companies are marketing special prepaid cards just for teens. Visa’s is called Buxx and aims its campaign at kids and their parents. Mastercard calls its version the Allowcard. The company devotes a section of its site to teaching kids about money. If you register, you’ll receive new money tips every month.
