Friday, May 2, 2008

Are Prepaid Cards right for teens?

One of the major target markets for prepaid cards is for teens. Teens are not allowed to be issued real credit cards, but also need to learn about money management before they are of a legal age. Here are two different perspectives of allowing the use of prepaid cards for teenagers. I think both show the control is in the parents hands.

But ABC 40 brings up the point that parents could be teaching their children how to fall faster into debt. According to the news story, once the teenager runs out of money on their card and goes back to their parents, the parents just reload the card instead of teaching the children about money spending habits or how to control the money they have on their card.

At Suite Life 101, they encourage giving teens prepaid cards in order to help them build awareness of money management. The prepaid card for this group can be most beneficial. Parents can monitor the spending habits of the teen, and guide them to the right decisions, as this article states. The value of prepaid cards for teenagers is providing them with learning more about money management, debt, and credit cards and prepares them for the future.

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