Parents teaching fiscal responsibility, look to prepaid

Parents are increasingly turning to prepaid cards to teach their preteen and teenage children about financial responsibility.

Recent data from the Prepaid International Forum (PIF) found 60 percent of parents believed prepaid cards offered their kids a greater sense of financial responsibility and served as effective budgeting tools. For parents with children under the age of 12 specifically, prepaid is the No. 1 tool they use to introduce money management to their kids.

Because children (or anyone for that matter) can’t spend more than what’s loaded on a prepaid card, parents have the peace of mind their children won’t incur debt as they taste financial freedom. Of parents with children using prepaid cards, 43 percent said they most appreciated receiving their children’s balance and transaction histories.

PIF, which surveyed 1,000 parents of children under 16, concluded 26 percent of kids 15 and under had used financial products to make purchases. Forty percent of those used debit cards, while 58 percent used prepaid cards. Additionally, children under 16 make up 35 percent of first-time prepaid account openings. For those under the age of 12, prepaid is five times more popular than debit cards and mobile payment accounts.

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