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"Kids could benefit from prepaid credit cards"

By admin | September 17th, 2008 | Credit Cards

The prepaid credit card market has been increasing in popularity and value over recent years, and a recent report estimated that that the value of this market was due to rocket by 2010. This could be partly due to the global credit crunch, which has resulted in fewer people being able to get their hands on standard credit cards as a result of the tighter credit conditions put into place by lenders since the onset of the credit crunch. With many still wishing to enjoy the ease and convenience of shopping through the use of a card some people may turn instead to the prepaid credit card as an alternative to the standard card.

However, another popular use for the prepaid credit card is for parents to provide their kids with not only some form of financial back up in case of emergencies but also a tool to help them learn more about budgeting and spending responsibly. According to a recent report a number of parents have expressed an interest in prepaid credit cards to help their kids to learn how to manage their finances more sensibly.

One industry professional said: “Because most adults qualify for credit and are comfortable purchasing with credit cards, they aren’t necessarily the ideal target for prepaid debit cards. But teenagers, who may not qualify for traditional credit cards and whose parents are likely uncomfortable with them spending on credit, are the perfect target for prepaid debit.”

An official from a prepaid credit card company said that these cards offer an effective way to start teaching kids financial responsibility from a relatively early age, stating: “Because prepaid cards are a safe way to give teens experience using plastic, they appeal to both parents and teens alike. Card issuers and banks might look at prepaid debit as a way to build brand loyalty and trust from an early age, tapping into teen spending today and adult spending and credit tomorrow.”

Recent Additions:

• Over half a billion worth of credit card fraud last year
• Prepaid credit cards should get more popular
• Little point in a rewards based credit card for those that fail to collect
• Many cardholders can become confused due to multiple credit cards
• Credit card switching likely to continue

Tags: prepaid credit cards

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