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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.

Prepaid Debit CardsKim Kardashian's 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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Dear Dish-It In The Forums

labimba
labimba posted in Style:
Neko girl I have to get back in shape for September if u want we can be training buddies!  :)  
reply about 20 hours
animallover468
animallover468 posted in Style:
EndlessDream is right. Skipping breakfast and lunch can result in stomach ulcers and sudden weight gain (had personal experience...), ESPECIALLY skipping breakfast! You have to incorporate exercise in your daily routine. Stomach and body fat is mostly caused by lack of exercise, and maybe that means you need to do toning exercises. Try doing simple exercise videos like the 3-mile powerwalk on YouTube (trust me, I sweat like crazy when I do those workouts). Anything that gets you sweating, is the kind of exercise you need to do.  I hated working out when I first started my weight loss journey too. I would always start wheezing every time I started working out. But after pushing through everyday, I think working out is one of the best stress busters I've ever had!  If you want to lower your appetite though, I suggest eating a full lunch and breakfast and skipping your dinner. If you can't skip dinner, then at least try aiming for an early dinner, around 5:30 or 6:00. Your body needs time to digest at least 4 hours before you sleep. I started gaining weight around puberty when I was 12, it could be the same for you too.  But honestly, there's nothing wrong with having consciousness about your weight. Now starving yourself and dieting is BAD, but there's nothing wrong with changing your lifestyle in order to be fit. It's a good thing that kids start caring about their health, and the earlier you start, the better off you are. 
reply about 21 hours
EndlessDream
EndlessDream posted in Style:
You need breakfast and lunch. Starving yourself, even if you aren't hungry, makes you loose energy to the point you could pass out from not eating. Keep your diet healthy. For breakfast, at least have yogurt, fruit, and juice. Drink at least 4 full glasses of water a day. Trim down on the snacks. Everyone has different bodies and build. You may just be large-boned. And that's not bad! That makes you stronger and higher ability to gain muscle. Loosing weight doesn't happen over night. It can take months. 
reply 1 day
Nekogirl101
Nekogirl101 posted in Style:
For years my parents would tell me I'm skinny but compared to other people, my waist was bigger and I would always hide it. Though it was obvious I weighed more, I've only been doing this for a week and I didn't ever tell anyone what I was doing until my parents found out. I would skip lunch and breakfast and say I was full. I only ate a big dinner every night. Once my parents found out, they said it was unhealthy and if I didn't  stop, I would develop an eating disorder. I obviously listened to them, but I've tried as best as I can so far. I have barely lost any weight from exercise and my parents won't let me go on a diet because I already 'eat healthy enough'. I want to lose weight without exercising being 3/4s of my lifestyle. I know, I'm a lazy idiot for saying all this.
reply 1 day
rainbowpoptart
Yes, purely for the fact that you should not "hate" your sister (or anyone, for that matter).  I'm guessing by "get in trouble for her", you mean she does something wrong and the blame is all put on you? Yeah, little siblings tend to do that a lot. My brother did for the longest time, until my parents found out how much a liar he is. She, hopefully, will grow out of this eventually. Either that, or your parent[s]/guardian[s] will eventually see through her. You lose your friends to her? By this do you mean your friends want to hang out with her and they want you to tag along and you don't? Or do you mean your friends chose your sister over you? If it's the latter, then perhaps you shouldn't have ever referred to those people as friends. You'll find friends who'll prefer you over your sister, I'm sure of it. The only thing I can tell you to do is try to get along with your sister. Every group of siblings has their cats and dogs moment in life, but they grow out of it (most of the time; there are, of course, circumstances where it doesn't work out that way). Please be grateful for your sister, even if you two fight a lot. You never know how much you need something until it's gone.
reply 3 days