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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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Dear Dish-It in the forums

classicalmusicisepic
"shae508" wrote: "classicalmusicisepic" wrote: my friends offline are having some relationship problems atm and there are just some things i want to mention on here, because i think they're relevant; some warning signs, etc and how to approach them. these not only apply to romantic relationships, but also friendships etc. physical harm - this might be an obvious one. but i just want to share some ways to approach the situation. this includes unwanted touching, hitting, kicking, etc. if your partner is doing this to you, you must report it to a trusted adult, teacher, counselor, close friend, or family member. this is one of the most serious abusive relationships- there are many resources online such as childline, etc, and hotlines you can call if you need to speak to someone about it. they may be able to help you get out of the relationship, and give you a shoulder to cry on. pressure into unwanted intimacy - this is also one of the big ones- your partner should never make you feel uncomfortable or otherwise. if they wish to stay with you, they will wait until you're ready to move onto that stage; if you even ever will be. if you feel pressured, or pushed into doing something you feel you'll regret, sit down and talk about it with your partner. you have a say in your relationship, too. control over your friends - if you feel like your partner has control over your friends- something is wrong. if they want you to dedicate every second of your life to them, with no other people, it's not right. your relationship not only affects the two people in it, (or more if it's polyamourous), but everyone around is affected by your relationship, too. again- you have a say in how your relationship is going, too!   criticizing you and your choices - relationships are about liking each other- if your partner is putting you down or demeaning you, it's a warning sign to get out of it. are they mocking you? or putting down your appearance, clothes, etc? Definite red flag; talk about it with him/her/them.  other signs, include: -being doted and adored one day, and the next being pushed away and ignored, -you're afraid of your partner -they obsess over and call/text you constantly -you may find you've lost your confidence -many ups and downs in the relationship, constant roller coaster -you aren't yourself. you change and adapt for them, drop hobbies if they're not into them, etc. -something tells you you cant trust them again, there are many resources out there if you need to talk. never be afraid to speak about it to someone- a family member, a teacher, a close friend, the police, a guidance counselor, etc.  I bolded that one part. The whole thread is great. And that one is a sign. But remember people with mental illness may also show signs like this to. If they have a good they they may spoil you and love you, and then the next day they're having a bad one. So they might push you away. They also may suddenly dote on you one day also to make up for a bad day. I'm not making an excuse, it's still a ver bad thing to do. I'm just putting it out there. that's a good point. 
reply 24 minutes
shae508
shae508 posted in Friends:
"classicalmusicisepic" wrote:my friends offline are having some relationship problems atm and there are just some things i want to mention on here, because i think they're relevant; some warning signs, etc and how to approach them.these not only apply to romantic relationships, but also friendships etc.physical harm - this might be an obvious one. but i just want to share some ways to approach the situation. this includes unwanted touching, hitting, kicking, etc. if your partner is doing this to you, you must report it to a trusted adult, teacher, counselor, close friend, or family member. this is one of the most serious abusive relationships- there are many resources online such as childline, etc, and hotlines you can call if you need to speak to someone about it. they may be able to help you get out of the relationship, and give you a shoulder to cry on.pressure into unwanted intimacy - this is also one of the big ones- your partner should never make you feel uncomfortable or otherwise. if they wish to stay with you, they will wait until you're ready to move onto that stage; if you even ever will be. if you feel pressured, or pushed into doing something you feel you'll regret, sit down and talk about it with your partner. you have a say in your relationship, too.control over your friends - if you feel like your partner has control over your friends- something is wrong. if they want you to dedicate every second of your life to them, with no other people, it's not right. your relationship not only affects the two people in it, (or more if it's polyamourous), but everyone around is affected by your relationship, too. again- you have a say in how your relationship is going, too!  criticizing you and your choices - relationships are about liking each other- if your partner is putting you down or demeaning you, it's a warning sign to get out of it. are they mocking you? or putting down your appearance, clothes, etc? Definite red flag; talk about it with him/her/them. other signs, include:-being doted and adored one day, and the next being pushed away and ignored,-you're afraid of your partner-they obsess over and call/text you constantly-you may find you've lost your confidence-many ups and downs in the relationship, constant roller coaster-you aren't yourself. you change and adapt for them, drop hobbies if they're not into them, etc.-something tells you you cant trust themagain, there are many resources out there if you need to talk. never be afraid to speak about it to someone- a family member, a teacher, a close friend, the police, a guidance counselor, etc.  I bolded that one part. The whole thread is great. And that one is a sign. But remember people with mental illness may also show signs like this to. If they have a good they they may spoil you and love you, and then the next day they're having a bad one. So they might push you away. They also may suddenly dote on you one day also to make up for a bad day. I'm not making an excuse, it's still a ver bad thing to do. I'm just putting it out there.
reply about 2 hours
jordand08
jordand08 posted in Friends:
No problem!
reply about 2 hours
classicalmusicisepic
"jordand08" wrote:Good thread! I love it! :love  (: thank you! 
reply about 2 hours
jordand08
jordand08 posted in Friends:
Good thread! I love it! :love 
reply about 2 hours

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