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Targeting Teens with Plastic: The Dos and Don’ts of Prepaid Cards

There’s a point in everyone’s life where keeping money in a piggy bank, desk drawer or shoebox just doesn’t make sense. As a teen, choosing where to store your cash can be tough. While opening a bank account seems obvious, you may find yourself drifting toward a prepaid card.

Understanding Prepaid Cards

Prepaid cards MAY seem like a smart choice. After all, they can be used anywhere, are safer than cash and you can only spend the amount loaded on the card. Prepaid cards also let you track your spending like a normal bank account. Plus, these cards come in cool colors with celebrity endorsements – even Kim Kardashian wanted you to use her Kardashian Kard for a while (unfortunately, with unbelievably high fees, this card is no longer available)! But be warned: no matter what Kim or the gang from Twilight tells you, these cards can actually be more of a trap than a tool when it comes to your cash.

Making the Right Choice

First thing’s first: don't ever make a decision on who to trust with your money based on stuff like celebrity endorsement, color or “cool factor.” Many prepaid cards have fees as high as $100 a year – that’s WAY more than a normal chequing or savings account offered by your bank!

So why would you EVER consider a prepaid card? Well, some people say that prepaid cards let you work with your parents to develop good spending habits. This can be a really good thing, but it really doesn’t make up for the fact that the fees they carry are way too high. If you want a prepaid card, expect to pay:

  • A setup fee of between $6 and $15
  • A loading fee
  • A monthly fee (that’s EVERY month)

All together, depending on how much you use the card, you could average $70 or more in yearly fees – and that’s not including standard fees like ATM use or transfers.

Better Alternatives

One alternative to a prepaid card is to open a bank account. If you work with your parents and someone at your bank to choose the right bank account for your spending/saving habits, you could avoid paying such high fees. However, if you don’t use your account properly, you may actually end up paying more in fees than you would with a prepaid card.

The other option is a credit card, which can help you improve your credit score (this will help you do things like borrow money for a house or car when you grow up. HOWEVER, credit cards have been known to get a lot of people in a lot of trouble, because they basically allow you to spend money that you don’t have/isn’t yours, and then charge you really high fees called interest when you don’t pay back that money on time. You should NEVER get a credit card without talking to your parents and bank about it first. Besides, most credit card companies require you to be a certain age before you can sign up for one.

Bottom Line

No matter what direction you go (prepaid or traditional checking), don't let celebrities or your favorite role models play a part in your personal financial decisions. There are a lot of ways to learn about money; paying unnecessary fees is not one of them.

HAVE YOUR SAY: How do YOU save your money? Let us know by leaving your comment below!

About the Author

Alex Matjanec is the co-founder of www.mybanktracker.com: an easy-to-use web portal that lets consumers rate and review banks, compare interest rates and learn more about the savings and investment options to best meet their goals.

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shygirl03
shygirl03 posted in Friends:
So there's this guy in my class and he sits next to me. Correction he HAS to sit next to me, So my classroom as a table with 2 desks connected to make a huge desk but separated holders things to put our stuff in. So this guy is really the class clown of the class and he can be a jerk when he wants to be but sometimes can be a really nice guy. He likes to talk to me and he "Occasionally" Touches my hand or arm in a friendly way.. I think :3 but anyways he teases me ... A LOT but he sometimes insults me but when he sees my face not cracking into a smile. he instantly says sorry or didnt mean it like that kind of way and i smile. So does he like me? Or he just being a regular guy? 
reply about 1 hour
Mrawsomegamer
My best friend is autistic and mild to moderate on the spectrum. He has a daily routine and obviously keeps to it.  His sister who's 18 told me about his condition. And she spoke to me about how much help he needs around the house. My friend doesn't actually need all that much help, as his autism isn't that bad compared to others I know. He mainly suffers reading people's emotions, and having the confidence to make friends and talk aloud. But his sister did complain that he was always the needy one around the house when she was younger.  What you've got to understand is that autism affects people in different ways, no autistic person is the same, and so requires a different level of work and help towards them. Your brothers didn't ask for this. They were born like that. I know how it feels though, feeling left out. And feeling like your parents don't love you. They really do. They just don't have time to express that love, which is kinda sad really.  Maybe you could get involved in helping your brothers out. Depending on how old they are, you can educate them on reading emotions, and things like that. They're great life skills. Or simply just being there for them is something you can do. Autism itself is a pretty frustrating thing for the person who has it. My friend hates it, but tries to live with it as a gift. Just a little support can go a long way.
reply about 3 hours
donteatcarrots
donteatcarrots posted in Friends:
This is a really weird situation... Maybe she's feeling sorry for you?
reply 1 day
AnneS12
AnneS12 posted in Family Issues:
Well That is your choice who you want to stay with.Nobody can force you about it.When your parents see a family<a data-cke-saved-href=" lawyer, then he will ask you whom do you want to stay with and jury will decide.So dont worry .
reply 2 days
worldqweencc
worldqweencc posted in Friends:
I'm not quiet sure what's a real friend and what's a fake one anymore. I know when there's a friend who's only a school friend rather than an 'outside' friend as well, but at the same time it makes me so confused. Here's my story: There's a girl named Xian. We had a unique way of becoming friends ... but it clicked. For the whole year I've been trying to keep in contact with her ... but she's not very willing to try and put in any effort to stay in contact with me. Her personality is beyond sweet, and her skills at art are even better. If she was to have an award, it would be a giant trophy with her face plastered on it and big bold letters listing 'Nicest Girl In The World!' ... Its just ... she lied to me.  I was all about this friendship. I was ... i'll admit ... sort of a lost puppy following around her owner.  So, I got her this T-Shirt she really wanted for her birthday, and not long her birthday was mine, April First. I was expecting at least a letter, or maybe even something cheap. It didn't really matter to me.  But on my birthday she didn't even come to school. Nor when she got back did she ever say sorry, or give me any be-lated gift of any sort.  That should have been my first clue. Even my mother started catching on. My second clue was she even told me she was oblivious and wasn't good at keeping in contact. I thought she was joking. How could a friendship so sweet be tossed out just like that? My third one was near the end of school, one of her friends in elementary was bragging about the plushies she got from Xian. Apparently she had four from her.  Xian had originally told me it was AGAINST her religion to give out gifts to other people. I knew she wasn't lying about her religion in general, because I met her mom on a field trip and she was quiet ... different. But I didn't understand why Xian had gotten so many small plushies for her, and yet not a single small stamp for me? My last clue was the last day of school. She didn't even try to say good-bye or even hang out with me for that matter. I know what you're thinking. "Girl, you've gotta be kidding me if you can't see that she has no intention of being your friend!" But this girl was the nicest to me. She stood next to me during harsh times, and comforted me when I was down. She told me I was important.  And you don't get many friends to do those special things to you. It was rare to have a friend make me feel so tall and worthy.  ... So ... I can't understand ... why'd she do all that .... and suddenly ... just ... walk away ...
reply 3 days

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