Pre-Paid/Reloadable Visa/Mastercards....What's the best deal?

[kristenrice]

My 16-yo DD has her own debit card that she is very careful with. She doesn't have a part-time job yet (she just turned 16 today) so the money in her account is mostly birthday money and funds she has accumulated through odd jobs through the years. She has a little over $300 because she is very frugal and very careful with her spending.

She has found some items online that she wants to buy, but they are not from any sort of "big-box" or name brand merchants. Because I am not familiar with the websites, I suggested that instead of using her debit card directly, she should buy a pre-paid Visa/MasterCard and use that instead so that if the site isn't legitimate, at least they won't have her bank account and debit card information. She agreed that it was a good idea and she was fine with the fact that she would incur the added $4-$5 activation fee on the card.

So, that being said, does anyone have any ideas of where to get the best "deals" on a pre-paid or reloadable Visa or MasterCard? Is there any advantage to one over the other? Anything to look out for? She needs between $25 and $50 so we aren't talking major money. I just want to make sure that her debit card stays as secure as possible so I'd rather keep it "offline" as much as possible.

 

[cvjw]

When my kids didn’t have their own credit card yet, they just used ours for online spending. Seems much easier than buying a prepaid visa and incurring the extra fees.

 

[starry_solo]

When my kids didn’t have their own credit card yet, they just used ours for online spending. Seems much easier than buying a prepaid visa and incurring the extra fees.

Agreed. Plus if there are any issues, you have a company to fall back on (credit card company) and a long term relationship with the company

 

[Etonduf]

You could consider adding her as an Authorized User (AU) on your credit card so that she gets a card in her name, but on your account. That way, you get the protection mentioned previously, no hassle with reloading, and it will start to build up a positive credit history for her, making it easier to qualify for a card or loan of her own when the time comes.

Some credit cards allow you to set spending limits for authorized users, if that's a concern.

Edit to add: It didn't click with me that she's 16, I was thinking 18. I'm not sure about age requirements for authorized users, but I believe 16 is okay.

 

[starry_solo]

You could consider adding her as an Authorized User (AU) on your credit card so that she gets a card in her name, but on your account. That way, you get the protection mentioned previously, no hassle with reloading, and it will start to build up a positive credit history for her, making it easier to qualify for a card or loan of her own when the time comes.

Some credit cards allow you to set spending limits for authorized users, if that's a concern.

Edit to add: It didn't click with me that she's 16, I was thinking 18. I'm not sure about age requirements for authorized users, but I believe 16 is okay.

Should be. I think I was 14 or 15 when my parents added me as an authorized user to their account. Since the account owner is the one responsible for paying the bill, an underage person should be ok to be an authorized user.

 

[Marionnette]

I added my kids as authorized users when they began driving at the age of 16. I wanted them to have access to credit if they had an emergency.

@OP - Does her debit card have an option to get one-time use codes for online use? That might be a better way to go.

 

[cvjw]

We added our boys to our credit cards when they turned 16 so they could buy gas for their cars and whatever else they may need.

A $5 fee for a $25 purchase seems excessive to me. I wouldn’t make my kids waste their money on fees!

 

[platamama]

Your DD is old enough to be an authorized user on credit cards issued by Chase and American Express, if you have any of those cards. I don't know of the lower age limit for Chase (I added my DD when she was 11 to start building her credit) and it's 13 for Amex.

There are sometimes deals on prepaid VI/MC available. For example, right now if you have a Just4U loyalty rewards account (the rewards program for stores like Safeway, Vons, etc. in that family of stores) you can log into your rewards account and add a coupon for $10 off a Visa gift card of $100+ (exp. 6/29). So there would be a (very small) profit to be made if you went that route. With those cards, you need to register them online (name, address) in order to use them for online purchases. The cards have a website printed on the back of the card so that you can go online and check balances and transactions. Definitely take a photo of the front and back of the card in case of loss.

As far as reloadable products go, I'm familiar with Bluebird and Serve. If you have a nearby Walmart, then Bluebird is the cheapest product since that account has no monthly fee and no fee for loading money into the account at Walmart (it will cost ~ $4 per load if you go anywhere else). At 16, she is ineligible to open it herself, but there is a family account option that you can open and add her as a family member. It will be accepted wherever Amex is accepted, and has Amex offers (basically cash back offers for a certain level of spend) available. You need to provide a SSN to open these accounts (the cards are free if you do it online, but there's a purchase fee of ~$3-4 if you buy a temporary one in-store), but it does not report on your personal credit report, and the cards provide more consumer protection than you'd get with a regular debit card.

Of the options, and with you only talking about $25-$50, can she just pay you back? Some credit card issuers (Capital One, Citibank, Bank of America) can issue a one-time use virtual card number for your credit card (but that's not great if there's a chance of returning a product).

 

[gottalovepluto]

Just so you know those card experience fraud to. The worst is when they’ve been drained before you even get home. Yes, that happens. The world of pre-paid debit cards is a minefield if you don’t know exactly what you’re doing. Also, some websites won’t take certain kinds of pre-paid debit cards but you won’t find out until your payment is denied (and sometimes they even put a hold on your money when they do that! Now THAT is a pain!).

Having your debit or credit card hacked/stolen is not a question of “if” but “when”. If she is going to be buying items ANYWHERE (store terminals get hacked too) with a debit card she needs to know exactly what to do when her card data gets stolen. Have text alerts to her phone enabled for all charges and withdrawals, make sure she has the phone number on the back of her debit card programmed into her phone to call the bank ASAP if she gets a notice of something she doesn’t recognize. Find out her banks policies so she knows how much money she’s on the hook for losing when her card is stolen. These are things she needs to know anyway if she doesn’t already.

For the current situation I’d have her use my credit card. If I only ran off debit cards she would just have to use her own debit card. I’d pass on the pre-paid debit cards because paying 20-25% more for an item but ultimately trading one risk for another risk is not a good idea to me.

 

[Best Aunt]

If you are going to look for pre-paid cards, watch out for expiration dates.

Check online circulars to see if anyone is having a special where they waive the fee. I have seen this sometimes in December. I have not looked at other times of year.

 

[kristenrice]

Thanks for all of the advice.

We opted to get a $25 Vanilla Visa gift card from CVS with the $3.95 activation fee. I decided to add it to my PayPal account and use that to pay. I'm glad I did! The next day, I got an e-mail from PayPal (yes, it was a legitimate e-mail....no links to other sites) saying that they had locked my account because they believed someone tried to access it without my authorization . I was able to successfully recover my account, in addition to changing all of our home passwords (router, wi-fi, banking...it was a LONG day yesterday ) I also removed all of my bank accounts and credit cards from my account so it has a $0 balance and nothing is attached to it.

My daughter feels terrible. I had warned her that those websites are often full of fraud and there is a very good chance that she will never see her sweatshirt that she ordered. She understands that she is probably going to be out the ~ $30 or so, but it was a learning experience for her. I tried to warn her, but sometimes, teenagers need to learn for themselves. I am just hoping that I have been able to secure our network and devices. We use Norton and I had a notice on my phone that a MITM was detected. After scrubbing everything, contacting our ISP, resetting our modem/router (including changing the network name/password), changing our firewall settings to "maximum" (it had been at the "moderate"/default) and running full system scans on every device, it looks like everything is clean and there are no unauthorized/unknown users on our network and no suspicious files on any of our devices.

 

[RangerPooh]

My girls are 12 and 14 and we got them GreenLight cards. They're VISA cards that are reloadable but without all of the additional fees. My girls use them for everyday purchases as well as when we travel. They recently used them in France. As a parent I have access to adding money and placing money into spending categories if I want.