-
x

Meet New Friends!

Recommended friends are based on your interests. Make sure they are up to date.

Friends
Kidzworld Logo

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.

Related Stories

 

17 Comments

Related Stories

Micro_a micro
Athletes make millions of dollars these days. Unfortunately, most of them have no financial skill...
Micro_a m
Question by Juan: Hey all! I’m fanatic of basketball. I’m really upset because I have to pay $75 ...
Micro_allowance-micro
Kidzworld has everything you need to know about allowance: how to save it, spend it and ask for m...
F1067448135562

What Do You Save Your Allowance For?

  • A big day out with your pals.
  • Video games and computer stuff.
  • Clothes, clothes and more clothes.
  • CDs or posters of my fave musicians.

Dear Dish-It In The Forums

trinityac
trinityac posted in Friends:
Sadly she isn't your friend... you should make new ones because she is fake
reply about 2 hours
trinityac
trinityac posted in Friends:
I understand and agree as well. I was worried my friends would think of me differently when I first started out on this and I waited for almost a year before showing it to them. They surprisingly thought it was cool because it was like a "beginner" social media.  
reply about 2 hours
partydiva01
partydiva01 posted in Friends:
Dear dish it, my friend first met eachother on the first day of kindergarten we sat next to one another and we became close. we were BFF's throughout 1st to 2nd grades. then, the second grade teacher realized there were alot of kids in the class. and same w the 3rd grade teacher. so, we had to have a split class. my friend was in the split. I was not. It all seemed like the teachers were doing somthing... weired. all the girls (well, almost there were only 6 girls on one half) were in the split. and all the boys were in regular . AND YOU KNOW WHAT ELSE WAS WEIRED! :( :( :( :( :( :( :( :( :( all the boy BFF's and the girl BFF's were SPLIT. me and my friend,kids named Nia & Georgia, Isaac& Ethan, and more. it was so sad for all of us.2 months later, I got homschooled. 2 years later im back in public with my 4th grade self. everything had changed. a bunch of people were obsessed w\ a girl my age named kassidy. im neighbors w\ kassidy and she is REALLY cool and nice. but the whole I  [s:sm3/1jw1] kassidy crew got mean. if I asked them to play they would say. "If Kassidy is playing I will" or I would want to be parteners with kassidy on something and they would freak out. anyway jasmine NEVER invited my to anything, and I am trying to be nice to her ( ice cream money, homework help, comfort when sad, ect.) And not to mention I invited her to 3 things!!! on the bright side she came to 2 :thumbsup :thumbsup she also embarassed me by saying that she was moving I freaked out  because I cared about her and I would cry all the time. I even held onto her and said sadly, "PLEASE DON'T GO!!  :sad :sad . later i found out that she was not moving, she was going to CA for a vacation. even the teacher was in on it!! :mad :mad anyways, my parents told me that i should just let go of her. But i am not ready. HELP??? :e :e :e :e :e
reply 4 days
PittsburghPenguinsFanatic
When I was a child I wanted glasses SOO bad, cuz I wanted to copy my mom and sister. And also, I thought they looked cool. I wear glasses now. I have had them for 2 years and honestly I don't mind them. Although, this year I am gonna pry get contacts for swimming better and stuff like that. But if you don't need glasses I wouldn't recommend wearing them. They're not bad, but trust me after a while you will pry not like them as much. But hey, that's my opinion. If you want to do it I'm not gonna stop you. Do what makes you happy in the long run. And tell your friends that they are non prescription if you don't need them, but still get some.
reply 5 days
Bratayley_Fan_7
She is not. I have faced this problem before so I know. You should make a new friend!
reply 5 days