Give Your Child a Prepaid Card
Children are growing up faster than ever before, and it definitely seams like that 13 is the new 18. Money, while always a sensitive subject between parents and kids, is an important aspect of their lives. Kids are always looking for more money, just like anybody else. Whether they need $20 for movie tickets or $50 for a video game, they are constantly asking for money. Some parents opt for giving their pre-teen a checking account, but that idea adds unnecessary stress to your life.
A prepaid card is like a Visa debit card, except each card has a predetermined amount on it. For example, you can buy a prepaid card for your child that has $50 on it, and reload the card each month. Think of them as a gift card that can be automatically topped off whenever the funds run out. While most kids will run out of money before the next reload date, you have a chance to teach them financial responsibility.
The prepaid cards currently offered are a fantastic way to teach them how to use virtual currency, which is becoming more popular. Consider the card as training wheels for a checking account. If they run out of cash, there are no overdraft fees, and they cannot ruin your (or their) line of credit. When it comes time to get a checking account, they are already used to swiping the plastic and using the card responsibly. In many ways, a debit card is just like a prepaid card, since they can (or should) only spend what is in the account.
If you are considering giving your child his or her own checking account, perhaps reconsider your decision and start them off with a prepaid card instead. The cards look and function like debit cards, but without the associated risks.
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