Surprise, surprise, only 20 days after its launch, the Kardashian Kard was pulled this week. While everyone can take a sigh of relief that another fee chasing card has been removed from the store shelves, the world of prepaid cards is hardly gone – with teens and underbanked still the main targets.

I have always been intrigued as to why consumers would go the prepaid card direction versus a traditional credit or debit card. While the most logical reason could be that the individual has bad credit and wont be approved, I see this as an issue for an older generation. For the teen demographic that these cards mainly target, products such as a savings or checking account should not be an issue and opening a kids or student checking out is definitely a more appropriate option.

Parents need to recognize that there is nothing illegal in targeting a young consumer with debit cards as the Kardashian Kard clearly demonstrated. This form of teen targeting can also be found across a number of other prepaid card companies such as Plastic Cash International, whose MyPlash cards feature musicians, Twilight personalities, as well as popular characters from video games.

Some argue that prepaid cards offer benefits of teaching teens how to be financially independent, while keeping them safe from carrying cash, and having the ability to track purchases. Yes, all of these points are true, but you can gain the same results from opening a joint checking account and transferring money for a monthly budget that your child needs to manage.

Paying Unnecessary Fees

The biggest issue with prepaid cards is the exorbitant amount of fees that these cards carry. Out of the gate more than 75% have a set up fee ranging from low $6 to as high as $15 which ViseBuxx charges. After that, you should expect to pay a loading fee as well as a monthly fee. All together depending on how active you are with the card, you could average $70 or more in yearly fees. This isn’t including standard fees such as ATM or transfers.

If you are able to avoid these fees, managing a debit or credit card should be easier and with lower fees. And unlike most prepaid cards – the traditional method can help improve credit score.

In our society, teens see celebrities or their favorite character as role models who can raise our awareness of all sorts of issues, but when it is applied to financial decisions, especially ones which that carry fees it may be time to keep this level of education in the hands of the parents.

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  • Patrice Peyret

    Most banks don’t offer the kind of joint account that would indeed be useful for parents and teens. They usually let parents open an account in the name of the teen, and then give the teen no separate access to it: the parent stays 100% in charge or has to share his/her username & password with the teen to share that access. And since most banks do not separate teen accounts from other accounts that the parent may have with the bank, the unintended consequence is that the teen ends up with access to everything if given a copy of the parent username and password.
    There are some exceptions of course but they are very rare.

    Teen prepaid cards are not that usual either. There is the Amex Pass, the Discover Current, PayPal student card, MasterCard Facecard, Visa Buxx and UPside Visa. Most of these cards have no activation fees, and some have 0 monthly fee. Only companies which can’t think straight print cartoonish logos or rock star faces on their cards: teens want to be marketed to as if they were adults because a card is an emancipation tool for them, not an accessory to their game console. Besides, the parents make the decision, not the teens; there is not better way to turn a parent off than to peddle cards as bright-colored toys.

    So, the teen financial service market has an equally small set of good choices among checking accounts and prepaid card accounts, but is is relatively easy to shop around and find good teen cards. More difficult with bank accounts: try typing “teen” in the search box of your bank portal…

    • D. Toman

      I am glad this person commented. We have bee looking for a prepaid card for our teens. We took our teens to all the sites of the companies listed above… American Express, Discover, Pay Pal, VIsa Buxx.

      We (1) printed out all the fees associated with them (2) We picked the three with the lowest fees which included MYPLASH, VIsa Buxx and American Express (3) we then asked out both our teens (son and daughter) to choose the card they wanted. They both chose the MYPLASH prepaid cards MasterCard has.

      Funny because the person who commented said teens don’t want images on their cards of music acts or other teen images, but thats what they chose. Also after comparing all the fees, the MyPlash card had the lowest of all of them and they have a fees page that tells us parents how to avoid all of them. I didnt see the other companies telling us that.

      Also the fees in this article for the MyPlash are not correct because we checked the site and as a consumer makes me wonder if this is someone trying to bash a good company. I would suggest parents go to all the sites, compare the fees and let you teen choose the best and least expensive card. We chose the card we think is perfect and the ones our teens will carry.

      Do look at all the fees as we noticed some funny fees with some of the cards

      • Alex Matjanec

        Thanks to Patrice and D.Toman for commenting.

        D.Toman, I am glad to hear you took the steps you did in introducing prepaid cards to your children. Your experience offered some great steps for our readers. Did you consider taking the path of opening a joint bank account?

        In response to your comment around fees, the ones listed were actually not meant to reflect MyPlash and instead offer an overview of the fees consumers could face if choosing this path.

  • Patrice Peyret

    Most banks don’t offer the kind of joint account that would indeed be useful for parents and teens. They usually let parents open an account in the name of the teen, and then give the teen no separate access to it: the parent stays 100% in charge or has to share his/her username & password with the teen to share that access. And since most banks do not separate teen accounts from other accounts that the parent may have with the bank, the unintended consequence is that the teen ends up with access to everything if given a copy of the parent username and password.
    There are some exceptions of course but they are very rare.

    Teen prepaid cards are not that usual either. There is the Amex Pass, the Discover Current, PayPal student card, MasterCard Facecard, Visa Buxx and UPside Visa. Most of these cards have no activation fees, and some have 0 monthly fee. Only companies which can’t think straight print cartoonish logos or rock star faces on their cards: teens want to be marketed to as if they were adults because a card is an emancipation tool for them, not an accessory to their game console. Besides, the parents make the decision, not the teens; there is not better way to turn a parent off than to peddle cards as bright-colored toys.

    So, the teen financial service market has an equally small set of good choices among checking accounts and prepaid card accounts, but is is relatively easy to shop around and find good teen cards. More difficult with bank accounts: try typing “teen” in the search box of your bank portal…