Last month it was announced that Justin Bieber was launching his own prepaid card to help promote financial literacy amongst his youthful audience. Many cynically noted that the card also happens to charge its owner $3.95 per month as well as an extra $1.50 per ATM cash withdrawal. Biber has over 48 million fans on Facebook and a further 30 million on Twitter. We have no doubt this card is going to be a hit.
Prepaid cards are a decent choice for the unbanked, that is those consumers who don’t believe they earn enough money to pay the fees associated with a traditional bank account and, as a result, don’t have one. However, the under-18 crowd that makes up Bieber’s fan base are not unbanked, at least the way the term is traditionally used.
True, teens and tweens all-too-frequently lack a bank account. But unlike low-income consumers, they are not looking for an easy way to pay utility and rent bills. Their expenses are more likely to consist of nights out the movies.
Teens and tweens probably do not need to become acclimated to the idea of paying $3.95 a month for the privilege of accessing their own money. It’s a shame as this card has the real opportunity to teach kids financial discipline and help parents control their kids allowances.