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.

Discover 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.