Prepaid Cards For Teens – Tips For Parents
Imagine this scenario. You and your spouse finally decided to provide your teenagers with prepaid debit cards or prepaid credit cards. You want to train them to become more responsible in managing their personal finances, and you believe that prepaid debit cards and prepaid credit cards are the right tools that will help them do so.
However, your responsibility as parent does not stop there. Keep in mind that it is essential to track or monitor how your children use their cards. Doing this will help you know if they will need your guidance on how to become responsible in handling their finances on their own or not.
Aside from providing guidance, parents like you are also encouraged to help their young children understand the important concepts related to the use of prepaid debit cards and prepaid credit cards. What are some of these important concepts? Let us talk about two of them.
On Prepaid Card Charges
The first important concept directly associated with the use of either a prepaid debit card or a prepaid credit card is the payment clause of the card program. As parents, you will need to let you children know and understand the fees, charges, penalties and other additional costs that come with their prepaid cards. What are some of these fees and additional charges?
Most prepaid cards today impose transaction charges and finance fees every time a cardholder withdraws money from an automated teller machine that is not affiliated with the card issuer. Also, cardholders may be asked to pay declined transaction fees should they fail to replenish the funds on their prepaid cards.
So, parents are responsible to teach their teenagers about these fees and costs. This way they can help their children understand that in every privilege they receive through their prepaid cards, there is always an accompanying obligation, in the form of fees, charges, penalties and other additional costs, that needs to be paid.
On Prepaid Card Rates
After discussing the common fees and charges imposed on prepaid card programs, the next thing that parents should discuss with their young children is the concept of interest rates. Though a prepaid debit card program does not impose interest, its counterpart, the prepaid credit card program charges interest especially for overdrawn transactions.
In line with this, parents must encourage their children to avoid spending more than the available balance on their prepaid cards. This way, they can avoid making considerable payments on interest, especially when they use prepaid credit cards in making purchase or in paying their other expenses.
Other Finance Related Concepts
Aside from discussing interest rates and fees, parents are also advised to help their children understand the importance of devising a personal budget. They will need to learn this very important lesson for this will help them handle their finances more effectively.
If this lesson is instilled in the minds of young children, for sure they will become financially-independent individuals in the future, who are able to handle their finances and plastic cards responsibly. Bear in mind the concepts that we have discussed in this short article, and for sure you will be able to help your teenagers manage their personal finances very well.
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