Crash course in debit cards for teens
by Melissa Brodsky
In the world of celebrity product and service endorsements, Justin Bieber has now partnered with BillMyParents to endorse a prepaid card aimed at the teen set. He joins the ranks of celebrities like Magic Johnson and the Kardashians.
For parents, a prepaid card means kids aren’t standing next to you, palms extended, begging for cash. For teens, the prepaid card can be a fabulous learning tool.
- Parents can use the card as a conversation starter for fiscal responsibility.
- It can help teach kids how to budget.
- There is no risk of overdraft fees. When the money is out … it’s out. The card can’t be used until the money is replenished.
- It is easy to use for both teen and parents.
- These generally have no effect on credit scores.
- With some general perks such as roadside assistance, these prepaid cards are a relief to parents in case of a minor emergency.
- Parents have complete control over spending. They are able to lock the card via a text message.
- Parents can get texts letting them know where their kids are spending, thus enabling parents to know where their kids are.
- There is a fee to load the card. The BillMyParents has a charge of $2.95 if loading from a credit or debit card and 75 cents if loading from a savings or checking account.
- There is usually a one-time fee for setting up the card.
- There is a fee to withdraw money ranging from 50 cents to over $1.50.
- There’s also a $3 charge for 90 days of inactivity.
- Replacing the card costs almost $8.
- If the card is reloaded from a bank transfer, the money is not available instantly.
- The prepaid card does not help build credit history.
Whether or not a prepaid card is the right choice for your child, it is important to teach kids to stay out of debt, use a written budget and spend responsibly.
Here are two proven ways to get started:
Special deals for teens: