Posts Tagged ‘Teenagers Credit Card’

Credit Card For Teens / Students

A prepaid credit card is the credit card for teens or students. Unlike a normal credit card, no credit check is required and there is no chance of your teen running up a large credit card bill.

Perhaps your teen mainly shops online or would prefer not to carry cash but due to a lack of any credit history they can not apply for a regular credit card. (And, let’s face it you probably wouldn’t want them to have one anyway). But, remember, it can be a great way to teach them basic budgeting.

Teens and students often need credit cards for a variety of reasons. They make it easier to purchase a variety of goods and services and are great to have on hand in case of an emergency. But maybe they’re not quite ready for a regular credit card. A prepaid credit card is just what they need.

Advantages of a Prepaid Credit Card

Prepaid credit cards operate more like a checking account with no overdraft facility. Money is prepaid onto the account and cannot be overspent.

The best part of the prepaid credit card is that your teen can charge to their heart’s content and they won’t be in any debt. The money is theirs and once it’s gone, they can’t spend any more until they make another deposit. And you can make deposits on their behalf. There are no bills and no interest charges. It’s the same principle as using a debit card linked to a savings or checking account.

Disadvantages of a Prepaid Credit Card

Well, they’ll have to pay a small fee to set up the account. In addition, they’ll have to pay additional fees every time they deposit more cash into their repaid credit card account. Also note, certain types of service , like a monthly internet subscription may not accept a prepaid credit card.

If you’re looking for a credit card for your teen, consider a prepaid credit card. They have most of the advantages of a normal credit card but you won’t have to worry about your teen getting into debt. And it’s a great way to teach your teens how to budget!

Prepaid Credit Card Application FAQs

If you are about to make a prepaid credit card application it’s likely you will have a number of questions. This short article will answer your main concerns.

What are Prepaid Credit Cards?

Prepaid credit cards are not a credit card as such, as no credit is offered by the card issuer. Money is placed, or “topped-up” on the card first and you can only spend what is available on the card at any one time. But, they carry a credit card brand (Visa, MasterCard, American Express or Discover) and can be used in the same convenient way as a normal credit card.

Who Are Prepaid Credit Cards For?

The short answer is anyone can apply for and use a prepaid credit card. There are no credit checks so, they are particularly useful for young people, teenagers or students, who have not yet built up a credit rating, or people with a poor credit history. But they can also be ideal for people who simply don’t want to run the risk of running up a large outstanding credit balance. They can be used for learning budgeting skills and can even be given as gifts.

Are There Any Charges On Prepaid Credit Cards?

Yes, of course, but as you can only spend what is already available on the card you will not incur any debit interest charges. Charges are typically for: the initial issue of the card; an annual or monthly fee; transactional charges. In nearly all cases the charges are small and dependant on how you want to use the card. For example, some cards have a monthly fee but with minimum transaction charges. Other cards are ‘pay as you go’ in which case there may not be a monthly or annual fee but you will be charged per transaction. You should, therefore, carefully consider how you will be using the card and then shop around for the best deal for you. You may also be charged if you make any transactions with the card that subsequently fail for some reason.

What Can I Use Prepaid Credit Cards For?

Pretty much anything that you would with a normal credit card (provided sufficient funds are already stored on the card.) You can shop on or offline, book travel and hotels, etc. even pay certain bills on some cards. Indeed, some cards act more like bank accounts. You can have your salary / wages paid into the card account and also set-up direct debits, etc. They are very flexible but remember there will likely be a charge for such transactions dependant on the card conditions.

Are Prepaid Credit Cards Safe?

Yes, in fact, in many ways they are even safer than normal credit cards. The amount available on the card at any one time is limited to the balance stored on the card and not a (likely to be) much larger credit card limit. Also many cards allow you to store your money off the card in a related Eaccount. In this way you can ensure that the card is only charged up with what you need on a day to day basis.

So, if you on the point of making a prepaid credit application I would certainly recommend them. They are safe and convenient and a great way to manage your budget.