Giving Your Teen A Prepaid Credit Card

Author 07.17.15

Training teenagers to responsibly use credit cards can be a difficult task, but often one that must be done. Teenagers who do not learn to properly tend to credit will suffer the pains of high credit card bills and overspending later in life. It is therefore a very good idea to set your teenagers up on prepaid teen credit cards so they can learn how to spend within a limit and how to responsibly utilize money. Prepaid teen credit cards have a great number of advantages over just handing your kids money and hoping that they learn their limits. For one thing, you can preload any amount you would like on a card and set bars depending on their spending habits, allowing you limit overspending and to keep them within reasonable boundaries. Another benefit is that most cards, if lost, can actually be canceled and replaced just like a real credit card.

Most prepaid cards offer a number of parental controls, checks, and limits that allow you to make sure your teenagers are learning responsibility with their cards. Learning how to responsibly deal with credit is something that requires time and observation. If your kids never know about their limits or spend time with their prepaid cards then they will not learn how to properly use them or a credit card. It is important to set realistic limits on them so that they learn to not put everything on the card and to budget their money. You can set weekly limitations, monthly limitations, or annual limitations as necessary depending on your teenager and what limits you feel that would benefit them the most. The longer that they spend on a prepaid card, the more time they have to learn how to properly use it and not hit caps or overspend.

A great thing about prepaid cards is that they confer many of the same benefits of a real credit card without their dangers. If a prepaid credit card is lost then you can usually just cancel it and reorder a new card so that you do not lose any of your money. Also, if your teenager overspends on a prepaid credit card, they will simply hit a cap and there will be no insane interest rates or damaged credit. Worse than anything else, missing a payment on a real credit card will substantially damage your credit rating which will stick with you for life, making it difficult for your kids to take out home and car loans in the future.

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