Credit Cards » Credit Card News » Teaching Teeners Better Credit Control with Prepaid Credit Cards
Date May 20, 2009

Teaching Teeners Better Credit Control with Prepaid Credit Cards

The credit card industry seems to be getting smarter and more creative in their credit card marketing approach. Although some of the marketing styles of credit companies have been a bit questionable as of late, this one is actually a step in the right direction.

Teaching Teeners Better Credit Control with Prepaid Credit CardsDiscover Bank is now issuing prepaid credit cards for the teenage set, with the proper parental control locked in. This practical approach of Discover is being received warmly by parents who understand the convenience of credit cards for teenagers but who also are wary of the financial responsibilities that it carries. With prepaid credit cards, parents get the best of both worlds.

The credit card is essentially an extension of the parent’s current credit card. A special account of the current credit card can be deposited with an amount up to $200 to make the prepaid credit card usable. The account also allows parents some control over the spending habits of their teenagers. These include putting limits on spending, tracking their kids’ transactions, and even creating automatic text alerts that they receive whenever their kids use their prepaid credit cards.

The prepaid credit card also encourages teenagers to spend wisely, as parents will have control on where the card can be used. Parents will therefore have the option of encouraging their kids to spend only in retail shops that they approve of. The prepaid credit card also comes with an automatic block that blocks purchases from bars, liquor stores, and tobacco shops.

Any parent knows the fear of their children misplacing their credit cards and having them used by someone else fraudulently. The prepaid credit card also comes fully protected against fraud in preparation for these situations.

Prepaid credit cards can also earn reward points for their owners. Online discounts and store coupons can be earned by kids whenever they use their prepaid credit card in selected venues and online sites.

Teenagers who have a job also have the option of automatically having their checks deposited to their credit cards every payday.

The prepaid credit card can be very helpful for parents who recognize the convenience of using credit cards for purchases. Furthermore, carrying these prepaid credit cards can be much safer for their kids than carrying cash.

Discover has been marketing these prepaid credit cards as great tools for teaching children smart spending habits. Parents are seeing the other benefits as well such as keeping track of their kids’ spending. The card’s appeal is quite apparent and Discover may have hit on a winning idea with their prepaid credit card idea. Imagine what a generation of prepaid credit card users can do to Discover’s market when they grow out of the credit card “training wheel” phase of their financial life.

Date April 21, 2009

Prepaid Credit Card Use Continues To Rise As Consumers Attempt To Avoid More Debt

As the credit crisis continues there are more and more people looking for ways to reduce their debt or avoid going deeper in debt. As a result, the use of prepaid cards is soaring by an expected 3 billion more dollars than last year. The reason for this increase in popularity- consumers are looking for the convenience of traditional credit cards without the risk of increased debt.credit-cards

Prepaid credit cards are not new in the industry however in previous years they were most attractive to people who either chose to not use unsecured credit cards or people trying to build credit. Since prepaid cards use the consumers own funds to establish available credit, credit history is not as big of a factor when applying for a prepaid card. For consumers who have good credit, the option of having a credit card that puts a cap on their spending (without incurring more debt) is very appealing in the current economic climate.

As prepaid credit cards continue to rise in popularity, consumers should know that using this type of card is not without a downside. While you provide the funds upfront, there are fees associated with the account. Consumers can expect to see application fees, processing fees and various other fees that can quickly reduce the amount of money you have remaining on your card to use for purchases.

If after reading the fine print on your prepaid credit card application you decide you are not willing to pay money to use your own money, you may consider looking  into other ways to prevent incurring more debt. Adjust your spending habits, cut costs and seek out other money saving strategies if using a prepaid credit card is not for you. Other consumers who do their research and find a prepaid credit card that has reasonable fees may be willing to pay a few dollars to have the convenience of using a credit card for purchases that otherwise would require a payment at the end of the month.