Prepaid credit cards are a great way of controlling how much you and your family spend. All you have to do is set up a monthly standing order to prepaid card account and do not top up any more in between. This way you will have a certain amount to spend each month, and when it’s gone, it’s gone. By sticking with your card, you physically won’t be able to spend more as the card will not let you complete a transaction if you don’t have enough money. If you’re trying to get out of debt this work like magic.

If you have children you can send them off with their pocket money on their card and that will mean that they can only spend as much as they have. You can also be assured that they won’t lose the money, even if they lose the card. Children ages 13 to 15 can get the card if they specify their parents as account holders; those 16 or older can apply for their own.

prepaid credit cards

By granting a prepaid card, parents will be able to teach their teens valuable financial lessons that will, hopefully, translate over to the real world. Teens with credit cards are irresponsible and are known to rack up an amazing amount of debt in a very short time. By showing them how quickly money can disappear the prepaid cards teach teens responsible spending habits and demonstrate that those charges have to be paid off somehow.

It’s up to the parents to stick with a firm plan if they are going to give a teen a prepaid credit card. You can not fill it up every time the teen spends the entire amount that was placed on the card. Set a monthly limit and explain to your child that once the money is gone then they will just have to wait until next month. If you want to take it a step further, allow the teen to borrow money and take that amount from next month’s total. You may also want to have your teen work for the money through chores or at the family business until they get a job on their own.

Prepaid credit cards are very similar to unsecured credit cards and can be used anywhere bank credit cards, MasterCard or Visa credit cards, or debit cards can be used. The difference is that the prepaid card acts more like a debit card. There is no need to worry about them going over the limit and you can track how much money they are spending on a monthly basis. An additional bonus is in knowing that your child is learning how to manage their money.

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