Prepaid Cards Teach Kids Responsibility

by. Konrad Christensen

Bieber fever has come to prepaid cards. In an effort to capitalize on the pop artist’s popularity with young consumers, Justin Bieber is now sponsoring a new prepaid debit card. Although this celebrity-endorsed prepaid card may be a sure hit with teenage consumers, many parents are questioning: Are prepaid cards right for kids?

Even though some suggest these cards should be kept out of the hands of younger consumers, the truth is prepaid cards can actually teach kids responsible spending habits. We know not all prepaid cards are created equal, and parents must do their due diligence when researching the prepaid card products, however overall prepaid cards are a good option for kids.

A big benefit to having a prepaid card is cardholders can’t overdraw funds, making it an ideal tool for teaching children and teens financial responsibility. Budgeting personal finances and reducing impulse spending is also why prepaid cards are becoming more and more popular. In addition, prepaid cardholders don’t need a traditional bank account or good credit score to get a prepaid card. Many teens from underserved or unbanked families can use the card to establish a history with the issuing financial institution.

Even though they are perceived to have high fees, in some cases prepaid cards can actually be less expensive for parents to maintain for their children than a checking or debit card account. With prepaid cards, there is no need for parents to pay the high interest-rate fees on credit card purchases.

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