Experts tell us those children who are not taught to make decisions about spending their money from an early age are very likely to become adults who do not know how to properly manage their financial responsibilities. It’s likely that adults who are burdened by excessive credit card debt had little to no involvement in money management or spending as a child.
Using Prepaid Cards as an Educational Tool
Parents who want their children to be educated and financially savvy have a new tool to use, prepaid debit cards. The cards can have funds loaded onto them at anytime and work more or less like a regular debit card tied to a checking account. However, unlike a debit card the prepaid cards cannot be over drafted or incur any large drafting fees. The user can only spend the amount available on the card. This makes them a great and SAFE tool to use to teach kids about financial responsibility. The cards transaction history is usually available online 24 hours a day. This is a great way to see where your kids are spending their money and teach them about smart spending decisions. Most cards also come with parental features including text alerts when the card is being used, and flagging controversial purchases from certain stores or online.
Many major credit card companies issue prepaid cards such as Visa, MasterCard, Discover Card and American Express.