Is it safe to give prepaid credit cards to kids?

Like its name goes, a prepaid credit card already has money filled up on it and you can charge your prepaid credit card as much as you like provided it remains within the “filled-up” amount. As a balance backs them, prepaid credit cards are guaranteed not to make you overspend. And once the prepaid amount on them is spent you will have to make another deposit if you want to start using your prepaid card again. The place to get prepaid credit card is your own credit card company.

Prepaid credit cards and kids

It goes without saying that kids cannot apply for and possess their own credit cards. But, and you will be surprised to know, a prepaid credit card for your child might be a convenient idea after all! Kids, as everyone knows, like to hang out with their friends, go for movies, to cafes, gaming parlors, etc. And kids need pocket money every now and then for these activities.

Parents normally give in to their kid's spending, as they know that it is a part of life, and so long as such spending is with their consent and is not excessive. And, instead of having their kids coming up to them often for a dose of pocket money, parents can equip them with a prepaid credit card that will take care of their riff-raff expenses.If the parents have decided to gift their kid a prepaid credit card, they should apply for one in their child's name and deposit a balance in the child's account. The card can be charged so long as there is a balance.

Advantages of prepaid credit cards for kids

The advantages of a prepaid credit card far outweigh their disadvantages. Here they are:

• Prepaid credit cards are easy to obtain, because all you need is a down payment. They are available online as well as in many stores.
• Prepaid credit cards allow you to take full control of your credit limit. As long as you deposit the cash, you can have it as high as you want.
• No annual fees or interest is charged on prepaid credit cards.
• Prepaid credit cards for children are accepted all over the place, anywhere where Master Card or Visa Card is accepted. On the contrary, gift cards are accepted only at some places.
• It is better and safer for children to carry plastic cash instead of real cash. If a kid's pocket cash gets stolen there's nothing you can do about it. But if your child's prepaid credit card is stolen, you can call up the card company and freeze any further card usage.
• As prepaid cards put a cap on spending, children tend to be careful with them, because they know that if they use up the credit card in a hurry they will have a lot to explain to their parents.
• There is no question of a prepaid card charging you late fees.
• When armed with a prepaid credit card, kids won't keep nagging their parents for pocket money every now and then.
• Parents get to know exactly how their kids utilize their pocket money. If a kid swipes the credit on an objectionable website, it gets reflected in the statement that goes to the parent.

Disadvantages of prepaid credit cards for kids

Owning a credit card is like owning free money and lots of independence. It gives kids a new high and many kids tend to get carried away by these factors. So, before you give your child a credit card you need to teach him on how to be financially responsible. Apart from that, there are some other disadvantages that prepaid cards have:

• You'll have to cough-up a one-time fee that activates the card. Plus, there may be a fee every time you top up the card with a deposit. So, if your kid swipes too often you'll find yourself paying fees every now and then.
• If your child keeps using the card to withdraw cash from the ATM then the very purpose of a prepaid credit card is defeated. You'll also be paying cash withdrawal fees every time cash is drawn.
• Prepaid credit cards will not help your child build up a credit history as the charges are debited to your account.
• If the card puts your child in the spending habit, then such a habit can get vicious as the child grows.
• The child can swipe the card on an adult site or even a gambling/lotto site on the net, something he cannot do if he gets cash as pocket money.

Therefore, the parents keep these advantages and disadvantages in mind before they decide top give their child a prepaid credit card. Purchase Virtual credit card for online shopping.