Why did you give your kids or teens a prepaid card?

Former_MSE_Joanne · 20 February 2015 at 3:06PM

We want to tap MoneySavers' collective knowledge on why you’ve given your kids a prepaid card. What were you looking for in a prepaid card for your kids? What rules did you set up in how they use them? How do you find the security facilities on the card? What features do you like or dislike?!

If you haven’t already, join the forum to reply!

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gloriouslyhappy · 25 February 2015 at 6:28PM

Really hoping to hear some real-life experiences, as this is something we're just beginning to discuss and need all sorts of different points of view before being able to make a sensible decision.

Make_mine_a_pasty · 25 February 2015 at 8:01PM

I am interested in getting one, purely for our family Apple account. I have a credit card registered but would prefer not to use that. But I am concerned that they are for bad credit risk persons and it may affect our credit rating (remember reading something about that on this site).

newkitchenfund · 25 February 2015 at 8:03PM

My kids have had their own 'under 19s' bank accounts with Lloyds TSB (now just TSB) since age 11 and 14 respectively. These offer a good rate of interest, a debit card, and do not allow overdrafts. They've both learned to manage their money well (with a few hiccups - but better to learn from their mistakes now!). Monthly pocket money goes in via internet banking from me. A parent has to countersign the forms to open the account for 15s and under.
The prepaid cards seem pretty poor value to me - they operate more like a gift card than a proper bank account, and far from paying interest, they charge for the privilege of using your money, and even for a replacement card if it is lost/stolen. However, there is a better level of parental control in that you can restrict its use and track your child's spending online more easily.

susi360 · 3 March 2015 at 2:41PM

My kids have had junior bank accounts with debit cards & no overdraft facilities for the last 5 years - they are now aged 19,18 and 16. I find one of the most useful things is that if they are out and need money, I can transfer some to them with online banking in a couple of minutes. For example, my youngest was on a school trip yesterday. They were buying their own lunch, and it was more expensive than we had thought it would be (it was at an art gallery in London), so she texted me and I transferred an extra £10 to her account.

I wanted them to have cards so I could pay them monthly, they could shop online, and have money available when they were out without me, but not have to carry much cash. The "no overdraft" facility was obviously important too - they did have a couple of problems with this initially, but the bank has changed the way they process debit payments now, to reduce the available balance immediately, which has prevented the problem re-occurring.

The older two were able to change their accounts easily to adult account (eldest) and student account (middle child), and register for online banking etc when they turned 18. The accounts are with Barclays, they were easy to open as I was already a customer, and they were available from age 11. I don't think they paid much if any interest, but there was never a lot of money in the account, so it wasn't a problem.

I didn't ever consider pre-paid cards, because I think they were not particularly flexible.

Why did you give your kids or teens a prepaid card?

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