Under the CARD Act of 2009, credit card issuers are prevented from advertising credit cards to students, and even 18 year-old students cannot get credit cards unless they have either an income or a co-signer.
But two prepaid credit cards are now available to youths aged 13 and up.
Parents are finding these cards to be both a convenience and a safety measure. For kids who lose things (like cash), they provide the security of being able to call and have the card number cancelled. For kids who are traveling away from home they provide peace of mind – because they can have quick access to emergency funds via a transfer from a parent’s account.
Parents who are trying to teach sound money management are using these pre-paid cards to distribute allowances, and urging their teens to make budgets, and track their own spending habits via on-line statements.
The two cards are the Facecard Prepaid MasterCard® and the UPSIDE VISA® debt free prepaid card.
The Facecard Prepaid MasterCard® carries a $3 monthly fee – unless you load $100 per month of new funds or spend $100 using the card.
As an incentive to spend (is this good?), the Facecard offers “Prewards” – which are digital incentives similar to coupons that are automatically added to the Facecard when a user clicks on “accept” after receiving an e-mail notice. These are incentives that card users can cash at restaurants and stores during a pre-set time frame. They could be anything from a “buy one get one free” offer for tacos to a discount on a music CD.
The Teen Facecard cannot be used to purchase alcohol, tobacco, adult entertainment, firearms, or ammunition.
But the Facecard isn’t just for teens. This card offers both direct deposit from paychecks and automated bill pay – so consumers who have trouble remembering to pay bills on time can avoid late charges on their monthly bills.
The UPSIDE VISA® debt free prepaid card offers three different plans, the first of which is free.
The basic plan allows for a maximum balance of $1,000 and comes with no activation fee, no monthly fee, and no fee for loading from a parents checking account. It doesn’t allow ATM withdrawals.
The Upside Access plan carries a monthly fee of $2.95, and allows ATM withdrawals and a maximum balance of $2,000.
Upside Edge allows a balance of $5,000 and an annual fee of $29.95 which will be waived if cumulative loads reach $2,900. It also provides free direct deposit from the child’s employer and online check writing for students aged 18 to 25.
The UPSIDE VISA® card is only available for consumers aged 13 to 25.
All three of these plans give parents real-time Internet access to their child’s transactions, so both parents and their children always know the current balances on the card, as well as where and how money is being spent.
Author: Marte
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