Prepaid Credit Cards For Teens
Teaching Financial Independence To Your Teens With Parental Control
Part of raising your child is to ensure that he or she will become financially responsible as an adult. Unfortunately it may not be as easy as it seems. With schools being so focused on the child's academic performance and banks focused on conditioning your child to spend beyond their means as young as possible how will your kid ever learn about financial responsibility when it comes to credit cards? The answer is you, the parent or guardian!
Teach Them Financial Independence
There's a difference between teaching your child and giving your child financial independence. A prepaid credit card will give your teenager spending power but what's the point if they can't understand the value of money? That is why, as a parent, it is your duty to educate your child, to tell them that money comes from hard work. Whether they simply get an allowance for doing the chores at home or work part-time for an employer, you can be sure your teens will quickly learn the value of money if they have to work for it.
Maintain Parental Control
It's one thing for your kid to learn the value of money, it's another to actually manage it. Although prepaid credit cards will restrict your teen from spending beyond their limit, it won't stop them from using up their allowance or income ASAP. That's why systems like the Current by Discover and PAYjr Visa which are prepaid credit cards for teens allows you to help your child manage their finances with features such as:
- Budget and track spending
- Helpful reminders
- Track chores online (Chore & Allowance system)
Although not every prepaid credit cards will offer such flexible management, it doesn't stop you from having some sort of agreement about financial managing with your child. You'll be surprised how much your child might need your help when it comes to managing income and expenses.
But...
Because prepaid credit cards work differently from regular credit cards, the prepaid credit card user will not be able to build a credit report through this kind of credit card. This means your child won't be able to build a credit report by using prepaid credit cards all their lives. Luckily for you, there is a safe alternative for your child to transition from prepaid credit cards to regular credit cards.
As a parent you'll want your child to have the best education in as many aspects as possible. It's completely normal to teach them how to earn, spend and manage their own cash flow. However, the rest will be up to your child. In the end, if your child is well disciplined, odds are he or she will be more rational about spending with their credit cards. The point of getting prepaid credit cards for your teens is to teach them financial responsibility as soon as possible.
