Can a prepaid debit card like Visa Buxx help your teen learn good money management habits?
One of the best things you can do for your children is to teach them good money management habits. Among the lessons that kids need to learn is how to responsibly use plastic.
It would be nice to think that your child will never open a credit card account, or swipe a debit card, but the reality is that he or she will probably do both of these things. Learning how to properly manage their money when using plastic is an important lesson for kids. You can introduce your kids to the concept of paying with plastic with the help of debit cards.
Prepaid Debit for Your Teens
I'm not a huge fan of prepaid debit. However, not every bank will allow your teen to open a checking account (even if it's a joint account with you). And, even if you do manage to open a checking account, your teen might not be allowed to get a debit card attached to the checking account.
It's in these situations that it can make sense to get a prepaid debit card. Choose a prepaid debit card that you can help manage, and that you can use to add allowance or complete other actions. Also, look for a card with relatively low fees. If you must choose a prepaid debit card, compare carefully so that your teen isn't stuck paying excessive fees just to have access to his or her own money.
Visa Buxx Prepaid Debit Card
Recently, the Visa Buxx card was launched. It's aimed at teens and their parents. The dashboard provides a great deal of access for parents, which is helpful, since it allows parents to see what their children are doing, and provide direction and correction when needed.
Additionally, the Buxx fees aren't onerous. There is an enrollment fee of $4.95 per card, and a monthly fee of $4.95 per card. However, this isn't out of the ordinary when it comes to prepaid debit cards; Buxx is about par for the course in this area. The monthly fee is a little bit higher than Justin Bieber's SpendSmart card, but Buxx makes up for it in other ways. The replacement card fee and the ATM cash withdrawal fee are both lower for the Buxx card than the SpendSmart card. Plus, there are no inactivity fees with the Buxx card, and the SpendSmart will charge you if you don't use the card for 90 days.
The Visa Buxx card comes with no loading fees for direct deposit, and you never have to pay to get help from live customer service. (You can get a complete fee schedule from the Buxx web site). It's also possible for your teen to customize his or her debit card, but it will cost $5. But, for some teens, that's worth it.
Overall, the Visa Buxx card isn't bad. It's on par with many of the better prepaid debit cards. If you are having trouble getting a checking account for your teen, and you want him or her to gain experience with plastic, this can be a good way to go.
Just make sure you incorporate lessons on budgeting, statement balancing, tracking income and expenses, and other money management fundamentals. And be sure to help your teen compare the cost of a prepaid debit card with the chance at free checking. Encourage him or her to switch to a “real” checking account later on, when it's possible to qualify and get a debit card that doesn't come with a monthly fee.