Teaching Kids Money Basics Can Prevent Chronic Credit Card Use
Many parents are shocked to find credit card offers addressed to their children in the mail - yet they don't think twice about signing their kids up for prepaid debit cards.
Credit card companies are smartly marketing prepaid cards as an easy way for parents to teach teens about money. We load a certain amount of money onto the cards, and our kids have to figure out how to budget it. But here's what they don't tell us. Prepaid cards come with as many - or more - fees as regular credit cards, say Atlanta bankruptcy attorneys.
By signing your children up for plastic at a young age, you may be putting them on a path to future credit card debt. While their name contains the word "debit," prepaid debit cards are not the same as the debit cards tied to your bank account. Creditor-issued cards come with a slew of start-up and use costs, like activation fees, maintenance fees, fees for purchases and reloading -even dormancy fees. From the start, you're showing your kids that they need to pay to, well, pay.
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