Prepaid Credit Cards for Teenagers

By: Want To Know It

Are prepaid credit cards a good choice for teenagers? What are some of the pros and cons of prepaid credit cards? This post will answer those questions.

A Good Choice For Teens?

Prepaid credit cards can be a good choice for teenagers who want to have the freedom associated with credit cards (such as buying online products) without the risk of raking up debt. Many of these cards have variable options for reloading the cards. You can allow parents to deposit money into the card or arrange for money to be taken out of you bank account on a consistent basis. Parents can use these prepaid credit cards to give an allowance to their teenage children. This can encourage responsible spending as the teens are limited to spending the amount on the card. So prepaid credit cards are generally a good choice for teenagers. Here are some additional pros and cons that you should consider.

Pros (Advantages):

• Cannot spend more than what is on the card, so you cannot get yourself into debt.
• Can order products online, purchase airplane tickets or reserve hotel rooms without the need for a credit card.
• Can give them to people as gifts (sort of like gift certificates or gift cards).
• Safer than carrying cash around.
• They function all around the world.
• Don’t have any interest to pay, unlike credit cards!
• Almost anyone who applies for a prepaid credit card will be accepted. In America, anyone over 18 will be accepted without a credit check.
• Can apply for prepaid credit cards over the phone or at your local branch.
• No bank account is needed for you to get a prepaid credit card.

Cons (Disadvantages):

• Have lots of transaction fees (the banks have to make money somehow). You are often charged an application fee as well as monthly fees. Read the fine print carefully to find out exactly what fees you must pay.
• You actually have to have the money to spend in the first place (you don’t get to spend the banks money as you do with a credit card). If you struggle with debt, this could actually be a good thing.
• Don’t help you establish a credit rating.

Other Financial Topics:

Credit Crisis Explained- How did we get here?

Tips on Credit Card Consolidation- Simple things to consider!

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