Would you give an 8 year old a prepaid card?

Rowan —  November 20, 2012 — Leave a comment

There comes a time in every parent’s life when they have to decide when to allow their children to control their own finances and learn the value of money. With a prepaid card kids can jump into the driver’s seat with the tools to teach them how to spend their money wisely, without the threat of debt or banking and identity fraud.

Youngsters must get their parent’s consent when applying for one of the products and they can also monitor what their children are spending their cash on.

There is a great system in the US called “PayJR” : the system allows both the parent and child to review chores through the web site. Printable chore chart and online calendars help parents and children manage chores and rewards. Ongoing “Balance Owed” is tracked by the PAYjr system

The basic premise of a prepaid card means that it is well suited to money management for kids. With no credit or overdraft facility attached children can only spend what is loaded onto the card, meaning parents can keep a close eye on outgoings.

There are no major security risks for kids carrying around a prepaid card either. If the card is accidentally lost or at worst, stolen, the card cannot be used by anyone in-store or at an ATM without the four-digit PIN.

There are a number of scenarios in which a prepaid card can help your children learn to manage their money. Parents may choose to send their teens away on a school trip with a prepaid card, pre-loaded with enough spending money for the duration of the trip. This is much more preferable to handing your kids a wad of bank notes that can be spent all too easily.

If you are preparing for a family holiday you may also consider registering your teens as an additional cardholder and provide them with a holiday budget to spend on activities, food and drink. Regardless of why they need a prepaid card, it is all fantastic experience for your children to understand about money using a real account.

Be careful though, some see the prepaid card as a way for kids to learn that when the money runs out, Mom and Dad can top up the card.

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