When you have to choose the first card for your teenager was below 18 years of age you will have many options. All of these options have their own and disadvantages and disadvantages. Here is a short list of the pros and cons of different kinds of plastic that you can get your teenager.
the obvious advantage of a debit card is that there is no credit involved. Your youngster can only use up the money that is already available in checking or savings account which will prevent him from getting himself under debt. It is also easy to set up and more readily provided by the bank if your teenager already has an account. The disadvantage of a debit card is that there is still a risk of over drafting the account and incurring the fees. However, the biggest drawback will be that a debit card does not build up the credit history as it does not work on credit and is not reported to the credit bureaus.
Prepaid or Stored Value Cards For teenagers
the advantage of prepaid or stored value cards is that the spending is limited to the amount of money that is preloaded on the card. He’s can of cards provide various services to the parents such as online checking of balances and spending. Authorised adults can load funds whereas some cards also allow employers to directly deposits the fund on the card. These kind of cards are versatile and can be used in many places for point of sale transactions. They also provide the parents would a lot of control features such as blocking transactions in certain places etc.
The disadvantage to ease can of cards is mainly that they are pretty expensive. A fee is charged for pretty much all kinds of transactions such as activation, loading money, monthly maintenance and ATM withdrawal. You may also find that this kind of card gets levied with an inactivity fee if not used for some time. Prepaid and stored value cards also do not contribute towards building up the credit history for the teenager.
Joint Credit Cards for your children
a joint credit card with a low credit limit take in out jointly by the parent and including the youngster’s name on it may be a good option. It works like a typical credit card and bills the credit history for the youngster. If properly managed it can be a great tool to teach your youngster credit management from an early stage. It can be used to educate the youngster in taking on on credit responsibility. The disadvantage of having a card like this is that a negative transaction can affect your credit history of both the parent and Child.
Secured Credit Card For Your Teenage Child
a secured credit card is a typical credit card except for the fact that the credit limit is determined by a security deposit that he’s made initially into a savings account that is tied to the credit card. This security deposit is used by the creditor to recover his money in case of default by the credit card owner. Theh advantage is that they are easier to get than unsecured credit cards and also serve to build the credit history of a person. The disadvantage is that they usually have a high APR which makes carrying a balance on it expensive. However, charging only what you can afford to pay off in full at the end of the month is one of the lessons that you should teach your teens.