prepaid credit cards

[kleubanks]

My husband and I are going to try giving our 14 year old daughter a monthly clothing budget to try and give her a real life budgeting experience.

I hate to give her cash (afraid it would make it too easy to buy things other than clothing) but do not feel she is responsible enough for a checking or credit card account.

My question is; does anyone have any experience with the prepaid credit cards? Are they easy to load?
I am most interested in one that does not have a fee. Do any banks or credit unions handle these?

Thanks for any personal experiences with these.

 

[poober25]

AFAIK, there aren't any w/out fees. IMHO, if she can handle a prepaid card, she should be able to handle a checking acct. and it gets her ready for the real world. I don't see how a prepaid card is any different. She still has to keep up w/ how much money is there and not overspend.

 

[mrodgers]

AFAIK, there aren't any w/out fees. IMHO, if she can handle a prepaid card, she should be able to handle a checking acct. and it gets her ready for the real world. I don't see how a prepaid card is any different. She still has to keep up w/ how much money is there and not overspend.

A prepaid credit card has X amount on it and tells you right at the register that you no longer have any money (probably to the poor kid's embarrassment.) A checking account will tell you 3 days or even more that you now have negative X amount in it because you drastically overspent.

Both situations teach the same thing, but the ending result of the 2nd situation would obviously be a much worse position to be in.

 

[IUTBAM]

If you are a USAA member, you can get a prepaid Master Card fee-free. We used one for my DD when she was younger (she got a college checking account this past summer when she graduated HS). It's super easy to maintain, and you can always access her account. We did it all online through usaa.com.

 

[NotUrsula]

DS14 has the most basic one from UpSide. AFAICT, it seems to be the one with the lowest fees. The one from WalMart is also highly rated, but it has somewhat higher fees.

The fees tend to be lower if you set up a direct deposit schedule from your checking account to the card.

In re: the difference between a prepaid card and a checking account, the most important from your teens POV is that the card can be used for online purchases, while a checking account cannot (or should not, if it comes with its own debit card; using an account-linked debit card to make online purchases is very risky.) In my DS' case, he also never has enough money in the account to avoid checking service fees (he uses his card for online gaming accounts.)

 

[angierae]

If you have an ING account, they have a debit card that is specifically for teens.

 

[kleubanks]

AFAIK, there aren't any w/out fees. IMHO, if she can handle a prepaid card, she should be able to handle a checking acct. and it gets her ready for the real world. I don't see how a prepaid card is any different. She still has to keep up w/ how much money is there and not overspend.

The checking account can be overdrawn etc. With so much identify theft etc, I would be more comfortable knowing that worst case scenerio, there is a limit to what can be lost. Also, like I said...she's 14.

 

[burnurcomputer]

I had a re-loadable gift card from a family memeber this past Christmas. One aspect that I did not enjoy was once the balance got lower, I had to know the exact amount o be applied to the total or the merchant couldn't use it. Something about not being able to verify the remaining amount?

 

[leight]

I use the american express one. They had a deal where I put $25 and they matched it. It was fee free until last month- then they took away the fees completely.

 

[arminnie]

Look into Visa Buxx (for teens).
http://usa.visa.com/personal/cards/prepaid/buxx_sign_up.html

 

[Diabolicdesire]

My DDs have the Amex pass card. The only fee is if they use the ATM which is rare. You can load as you wish or set up to auto load. I can go online and check the balance and even where the card is used. So far it has worked great!